Kuoni Group valued at Rupees 9,800 crores; Zubin to continue as CEO of both Kuoni Group and VFS Global

EQT, one of Europe’s leading private equity houses founded by Investor AB, Scandinavia’s largest industrial holding group and part of the respected Wallenberg Group, has made an open offer for publicly held shares of Kuoni Group at CHF 370 per share, representing 34.1% premium over the current 60-day volume weighted average share price.

Zubin Karkaria
ZUBIN KARKARIA
CEO, KUONI AND VFS GLOBAL

Based on this offer, the Kuoni Group becomes a much valued asset at around Rs  9,800 crore (on present currency rates, based upon  1.4 billion Swiss Francs).  Zubin Karkaria will continue in his dual roles as the CEO of Kuoni Group and CEO of VFS Global. Our sources say this should be a very good development for the company as it would bring stability and long-term approach in developing the company further.

VFS Global has a large presence on the Indian market, and is fully owned by Kuoni Group. However, Kuoni’s travel business in India (including SOTC) was sold off to Thomas Cook India last year.

Kuoni entered into a definitive transaction agreement with an affiliate of EQT, which will launch a public tender offer for CHF 370.00 in cash per registered B share. The planned transaction is to be implemented by a voluntary public tender offer. This announcement follows a competitive process with EQT as well as a number of other interested parties over the course of several weeks. As long-term investor, EQT will strengthen and expand Kuoni Group’s global business activities. EQT is one of Europe’s leading private equity houses founded by Investor AB, Scandinavia’s largest industrial holding group and part of the Wallenberg Group. EQT is committed to invest in the continued development of the Kuoni Group in order to enable the company to grow and strengthen its position as a leading service provider to the global travel industry and governments and to further increase its profitability. Group CEO Zubin Karkaria together with the current management team will continue to lead the company. The operational measures announced in November 2015 to accelerate the implementation of the defined strategy will be carried out as planned in 2016.

“Over the last months the Board has very carefully analysed all strategic options in order to secure the successful implementation of Kuoni Group’s strategy. As a result of this detailed and comprehensive analysis and a competitive process, the Board concluded unanimously that taking Kuoni private and handing over the responsibility for the group to an internationally renowned new owner with comprehensive experience in managing and further developing industry leaders, with the necessary financial strengths and with a long term perspective would be the ideal solution to the benefit of all stakeholders,” said Heinz Karrer, chairman of Kuoni Group’s Board.

Michael Bauer, Partner at EQT Partners in Zurich said: “EQT is proud of taking over the responsibility for the further successful development of one of the world’s leading travel services provider. We follow an industrial, long-term oriented approach when investing into companies to build sustainable market leaders. It is our ambition to enable the Kuoni Group to strengthen the market position of its businesses, both through organic growth and acquisitions, and to further increase the attractiveness of the Kuoni Group for clients, business partners and employees. This marks the starting point of a very promising era for Kuoni to continue to build successfully on its 110 years long journey.”

Zubin Karkaria, CEO of Kuoni Group said “We welcome EQT’s investment in the Kuoni Group, which underlines the attractiveness of our business activities. With the new owners we will be able to accelerate the implementation of our strategy. Investments in technology and supporting acquisition opportunities give the Kuoni Group an excellent platform to build further on its leadership positions in travel industry services. EQT has an impressive track record of growing companies. With access to their experience and network in both the travel and tech industries, we will be able to accelerate the implementation of Kuoni’s strategy.”

The joint management of Kuoni Group by EQT and the Foundation, the key pillars of Kuoni Group’s future development and the Foundation’s future involvement in Kuoni will be set out in this agreement. Key terms of the agreement will be disclosed in the offer prospect. Karl Hofstetter, Chairman of the Board of Trustees of the Kuoni and Hugentobler Foundation: “The strategy jointly targeted together with EQT for the sustainable development of the Kuoni Group is convincing and accords with the Foundation’s purpose. The Board of Trustees supports the takeover offer. We also reaffirm our intention to remain invested in Kuoni as long-term shareholder.”

Kuoni Group focuses on three core activities:

Global Travel Distribution (GTD) is an industry pioneer and a highly experienced, leading global distributor that provides travel companies with easy access to hotel accommodation and destination services. It sells approximately 38,000 room nights per day online. More than 40% of its turnover is sourced from fast growing markets in Asia, the Middle East and Africa markets.

Global Travel Services (GTS) sources and coordinates destination services – from accommodation, transportation, tours and activities to venues and event management. GTS is the number one player in the growing group travel market and handles 50,000 leisure tours per year. GTS generates 60% of its turnover from Asia/Pacific source markets.

VFS Global, the industry pioneer and world’s leading visa services provider, works for 48 governments, operates 1,837 application centres in 122 countries and holds an estimated 50% share in the Asia/Pacific region.

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