Sunwing and Signature Merger

[gonnabeapilot]

Guess things are getting a little bit more interesting in the vacation side of things. http://www.theglobeandmail.com/report-o ... le1305099/ Key points from the article.....

Two of Canada's major vacation travel businesses are being combined. Sunwing Vacations will join forces with tour operator Signature Vacations and its retail division SellOffVacations. Signature is owned by a U.K. company through First Choice Canada, which has been losing money over the past few years including $20-million in the first half of 2009. Sunwing has been owned by the Hunter family of Toronto, which will retain control of the Canadian company in partnership with Signature owner TUI Travel PLC, which operates in approximately 180 countries worldwide. As part of the deal announced Tuesday, TUI Travel will contribute $101-million and its Canadian operations including Signature Vacations to the new venture.

The company didn't disclose what type of efficiencies it anticipates or how employees of the two businesses will be affected. However, Sunwing chief operating officer Stephen Hunter said the combined company aims to grow.

Signature is one of the biggest customers for Skyservice, and if memory serves, they had just signed a 5 year contract with Skyservice this spring. I wonder how this is going to effect the people at Sky and Sunwing? It also just became a much more interesting winter for Transat and Westjet Vacations....

[ea306]

PRESS RELEASE:
http://www.sunwing.ca/newsstory


29 Sep 2009 - Sunwing Travel Group and First Choice Canada to create strategic venture

Sunwing Travel Group and First Choice Canada to create strategic venture Sunwing Travel Group and TUI Travel PLC have agreed to a proposed strategic venture with their respective Canadian tour operations and retail divisions. The venture will see an amalgamation of tour operator Sunwing Vacations, a wholly owned subsidiary of the Sunwing Travel Group and First Choice Canada's tour operator Signature Vacations along with retail division SellOffVacations.

Over the last five years, the Sunwing Travel Group, owned and operated by the Hunter Family of Toronto, has seen revenues increase from C$30million to C$660million and maintain underlining profitability throughout while First Choice Canada has seen their losses grow over the years to over C$20 million in the first half of the current financial year.

"The proposed amalgamation of tour operators will create a stronger company better able to compete against Canada’s leading tour operators while offering a broader range of travel destinations to the travelling public. The proposed company will be in a position to improve its product range and offer competitive prices with increased efficiencies resulting from the transaction." said Colin Hunter, Chairman and majority shareholder of the Sunwing Travel Group.

Under the terms of the deal,TUI Travel PLC will contribute its Canadian operations plus $101 million and Sunwing Travel Group will contribute Sunwing Vacations. In consideration, TUI Travel PLC will receive a 25% voting interest and an overall 49% interest in the Sunwing Travel Group.

Stephen Hunter, currently Chief Operating Officer of Sunwing, will take over as President and CEO of the Sunwing Travel Group while Colin Hunter will remain as Chairman of the Board.

Commenting, Stephen Hunter said, "As one of Canada's fastest growing companies with combined revenues of C$900 million along with the improved operational efficiencies, complementary product mix and a growing retail distribution, our business will be well positioned to continue the growth and profitability curve we have achieved over the years". The deal is subject to customary regulatory approvals. Scotia Capital acted as exclusive financial advisor to Sunwing on this transaction.

About Sunwing Travel Group

The Sunwing Vacation Group comprises Sunwing Vacations, a highly successful package holiday operator featuring departures from 30 Canadian cities to 31 sun destinations, and Sunwing Airlines, which this winter will operate a fleet of state-of-the-art 14 Boeing 737-800s. Headquartered in Toronto, the company also has sales offices in Vancouver and Montreal and employs almost 1,000 personnel in Canada and abroad. The company is privately-owned and headed by father and son team Colin and Stephen Hunter who were awarded the Ernst & Young Entrepreneur of the Year award for 2008. The Sunwing Vacation Group has been named by Profit Magazine as one of the fastest growing companies for four of the last five years

About TUI Travel PLC

TUI Travel PLC is a leading international leisure travel group which operates in approximately 180 countries worldwide and serves more than 30 million customers in over 25 source markets. Headquartered in Crawley, near Gatwick airport in the UK, the Group employs approximately 50,000 people and operates a pan-European airline consisting of over 150 aircraft. The company mainly serves the leisure travel customer and is organised and managed through four business Sectors: Mainstream, Specialist & Emerging Markets, Activity and Accommodation & Destinations. In the financial year ended 30 September 2008 TUI Travel had revenues of £13.9bn and an underlying profit before tax of £320m.

For more information visit www.tuitravelplc.com

[Jastapilot]

I can't believe there isn't a 3 page discussion on this!

[bigskyjoc]

If this happened to Canjet or Westjet you can bet there would be 3 pages of "great for the folks at..." and all the bells and whistles.

Or perhaps all those that were pointing fingers and making uninformed off the wall remarks are still in a mild state of shock.

[W5]

http://www.theglobeandmail.com/report-o ... le1306448/

from the article:
Sunwing is pledging to honour its contract to charter Skyservice Airlines Inc. to fly on behalf of Signature, but could switch to Sunwing's fleet within two years. Skyservice also flies on behalf of Sunquest Vacations, the country's third-largest tour operator.

[WetJet]

Or perhaps all those that were pointing fingers and making uninformed off the wall remarks are still in a mild state of shock.

Or perhaps people are taking a bit of time to digest the facts.

Facts like 101 million dollars had to be thrown into the deal to make the new company viable.

Facts like the last time a money loser was absorbed by another company in this business, (Canadian by AC) the mighty new company has struggled ever since. So now the new company could lose greater amounts of money, FASTER! Who wants to be in The Dominican when the 101 million runs out?

Facts like Transat stock was up over 25% since the announcement.

And worst of all:
Facts like if there are "ecenomies of scale" to be found, some of our friends and colleagues could end up on the street.

[bigskyjoc]

Or perhaps all those that were pointing fingers and making uninformed off the wall remarks are still in a mild state of shock.

Or perhaps people are taking a bit of time to digest the facts.

Facts like 101 million dollars had to be thrown into the deal to make the new company viable.

Facts like the last time a money loser was absorbed by another company in this business, (Canadian by AC) the mighty new company has struggled ever since. So now the new company could lose greater amounts of money, FASTER! Who wants to be in The Dominican when the 101 million runs out?

Facts like Transat stock was up over 25% since the announcement.

And worst of all:
Facts like if there are "ecenomies of scale" to be found, some of our friends and colleagues could end up on the street.

Or facts like how Westjets stock has been stuck in the mud around 10 bucks for way to long now (76 aircraft worth too long)

And let me be the first.... Congrats Sunwing and Tui.

----

[Rubberbiscuit]

Or perhaps all those that were pointing fingers and making uninformed off the wall remarks are still in a mild state of shock.

Or perhaps people are taking a bit of time to digest the facts.

Facts like 101 million dollars had to be thrown into the deal to make the new company viable.

Facts like the last time a money loser was absorbed by another company in this business, (Canadian by AC) the mighty new company has struggled ever since. So now the new company could lose greater amounts of money, FASTER! Who wants to be in The Dominican when the 101 million runs out?

Facts like Transat stock was up over 25% since the announcement.

And worst of all:
Facts like if there are "ecenomies of scale" to be found, some of our friends and colleagues could end up on the street.

You are taking a very onesided approach to it all Wetjet. Why so skeptical or perhaps biased?

Was Sunwing supposed to give up 49% of the company for free? I think TUI decided what is going on is obviously not working and decided to get in bed with a company who's business model has worked well so far. Sunwing was viable before 101M was thrown on the table.

Comparing the AC/CA merger has no merit as First Choice Canada has no aircraft etc and is simply a travel agency of sorts. Sunwing will do what is can to make Signature and SellOffVacations profitable again.

The reason for Transat shares going up is the anticipation of reduced overall capacity on the market with increased prices and better yields for all competitors.

I too hope this will transpire in a way that nobody ends up on the street. If Sunwing takes over the flying I am sure staff will be offered jobs. Just like Sunwing offered jobs to many of the unfortunate victims of Harmony and Zoom following their untimely demise.

[bigskyjoc]

I guess everyone at WJ is to busy wondering if they are going to make money flying from YEG to Hawaii with a half empty airplane.

[YVR Dude]

Or perhaps all those that were pointing fingers and making uninformed off the wall remarks are still in a mild state of shock.

Or perhaps people are taking a bit of time to digest the facts.

Facts like 101 million dollars had to be thrown into the deal to make the new company viable.

Facts like the last time a money loser was absorbed by another company in this business, (Canadian by AC) the mighty new company has struggled ever since. So now the new company could lose greater amounts of money, FASTER! Who wants to be in The Dominican when the 101 million runs out?

Facts like Transat stock was up over 25% since the announcement.

And worst of all:
Facts like if there are "ecenomies of scale" to be found, some of our friends and colleagues could end up on the street.

You are taking a very onesided approach to it all Wetjet. Why so skeptical or perhaps biased?

Was Sunwing supposed to give up 49% of the company for free? I think TUI decided what is going on is obviously not working and decided to get in bed with a company who's business model has worked well so far. Sunwing was viable before 101M was thrown on the table.

Comparing the AC/CA merger has no merit as First Choice Canada has no aircraft etc and is simply a travel agency of sorts. Sunwing will do what is can to make Signature and SellOffVacations profitable again.

The reason for Transat shares going up is the anticipation of reduced overall capacity on the market with increased prices and better yields for all competitors.

I too hope this will transpire in a way that nobody ends up on the street. If Sunwing takes over the flying I am sure staff will be offered jobs. Just like Sunwing offered jobs to many of the unfortunate victims of Harmony and Zoom following their untimely demise.

Exactly!!

Good post!