Sunsail under new ownership

Leading yacht charter and watersports beach club operator Sunsail has been acquired by First Choice Holidays PLC

Leading yacht charter and watersports beach club operator Sunsail has been acquired by First Choice Holidays PLC for an initial consideration of ’35 million plus a deferred consideration of up to ‘5 million.

Sunsail is the market leading specialist tour operator in the sailing holiday market. It operates principally in the Mediterranean, Caribbean, UK and the Indian Ocean. The Sunsail group of companies provides bareboat and flotilla sailing holidays, watersports beach club holidays, corporate sailing, sailing schools and third party yacht sales.

Highlights:

  • Sunsail is the leading provider of bareboat and flotilla sailing holidays and operates a fleet of over 900 yachts from 37 bases in 19 different countries. The company also offers beach club holidays with an emphasis on watersports. It operates five clubs in Greece, four clubs in Turkey and one club in Antigua in the Caribbean.
  • Sunsail’s customer base is international with approximately 60% from the UK and the remaining 40% from the United States, Germany, France and other European countries. During 1999 the group expects to carry approximately 87,000 passengers, a significant proportion of which will be repeat or recommended business booked directly with the company.
  • Sunsail, which is based in Port Solent, was founded in 1979 by Chris Gordon, Managing Director. His team has developed specialist knowledge and expertise and prior to this acquisition was backed by venture capital investors Mercury Private Equity and ECI Ventures. Chris and his team will be staying with the First Choice group to continue to grow the Sunsail operation. ·
  • There are expected to be significant synergies available from the combination of First Choice and Sunsail. These will arise mainly from the benefit of secured quality aviation contracts through Air 2000, First Choice’s in-house charter airline, increased sales potential through the First Choice distribution network and Signature Vacations in Canada, and savings in financial costs.
  • Given the current year profitability of Sunsail and the expected synergies, the transaction is expected to be earnings enhancing in its first full financial year following completion. 1
  • For the year ended 31 October 1998, the date of the last published audited accounts, Sunsail reported profit before tax of ‘2.5 million. At 31 October 1998, Sunsail had net assets of ‘8.8 million.

    Commenting on the acquisition, Peter Long, Chief Executive of First Choice said:

    “Sunsail is an excellent fit for First Choice and we are delighted to welcome it to the Group. It is the leader in a growing market where it has a strong brand and reputation not only in the UK but also in the United States and Europe. This acquisition brings synergies and a further international dimension to our business taking First Choice into a market where we were not previously represented. Sunsail will benefit from being part of a vertically integrated group where it will be able to leverage off Air 2000 and First Choice’s own distribution capability”

    Chris Gordon, Managing Director of Sunsail said: –

    “Being part of First Choice will enable us to continue to grow the business into new areas of operation and also take advantage of the natural synergies between the two companies.

    “Our clients can be assured that it will be business as usual and we shall continue to give the same personal service that we have always been renowned for since the early days. I look forward to being able to offer them even greater choice in the future now that we are part of a larger tour operating group.”

    Note: This statement should not be interpreted to mean that earnings per share will necessarily be greater than those for the preceding year.