UK based online beach holiday company, On The Beach, has recently acquired UK travel agency Sunshine, thereby increasing their reach and ability to attract exclusive contracts for their greatly increased customer database. Both parties are very much looking forward to coming together.
Sunshine.co.uk a UK-based online travel agency, has been purchase by On The Beach, a beach holiday specialist headquartered in London. The company purchased Sunshine for £12 million, seeing the company as ‘highly complementary’, and therefore an excellent target for an acquisition.
The news is positive for Sunshine as well. By combining forces with On The Beach, who have some 1.2 million customers, the full customer database will go up to almost 1.5 million. According to On The Beach, this will also give it the opportunity to negotiate on a wider range of exclusive products and contracts.
Sunshine is an impressive company, with £18.6 million in gross assets. Furthermore, its EBITDA was valued at £1.6 million according to its latest financial statements, which cover the 13 months before September 2016. According to On The Beach, the acquisition will mean both branches should see a significant enhancement in earnings.
One of the reasons why it was such an important and desirable acquisition for On The Beach was that Sunshine is a well-known brand across the United Kingdom. The transaction, therefore, offers great potentials for both. At present, On The Beach is a market leader, but only in the field of online beach holiday bookings. By adding Sunshine to their offerings, they can expand this market significantly. Most importantly, what sets On The Beach apart is that they offer exclusivity across the board.
While acquisitions usually come with significant redundancies, this is not the case in this particular instance. Rather, all staff and the full management team will remain in place at Sunshine, which includes Chris Clarkson, managing director.
Sunshine has had an interesting past and has experienced very rapid growth. In 2011, they launched as Bon Voyage, focusing exclusively on cruise holidays. Then, in 2014, they set their sights on Real Holiday Reports, a review website, which they eventually acquired. Chris Clarkson, the current managing director, is also co-founder of Sunshine, having launched it together with Chris Brown. They worked together previously, founding and building up the website HolidayWatchdog. In 2008, they sold this to TripAdvisor.
It is believed that On The Beach’s shared in the distant beach destinations market in the United Kingdom is as high as 20%. Thanks to the new acquisition, however, this can be significantly increased. Not just that, many of the other travel agents that focus on long haul beach holidays do not focus on the exclusivity that On The Beach does. As a result, their actual niche share is actually much larger than 20%.
A representative from Sunshine says:
“Chris Clarkson and Chris Brown are entrepreneurs at heart, while also being passionate about the travel industry. When they were offered an acquisition with On The Beach, they were instantly interested. They wanted to make sure none of us would lose our job as a result of an acquisition, while at the same time ensuring Sunshine could grow quicker and faster than it ever had before. We’ve all kept our jobs after the acquisition, so there are exciting times ahead.”
The new amalgamation of Sunshine and On The Beach will be particularly beneficial for On The Beach. However, both companies are in a constant state of flux, which may mean that On The Beach will eventually separate the two companies again, depending on whether they want to expand or contract their particular niche.