Investment in technology systems is likely to be the next stage of expansion by Capita plc in the business travel arena - though managing director of Capita’s travel business Trevor Elswood said he would “never say never” in making new acquisitions.
In August this year Capita plc acquired travel management firm Expotel for a consideration of £16m on a cash-free, debt-free basis. It now has two of the UK’s largest hotel booking agents in its business travel portfolio, following the acquisition of BSI for £42.5m in 2010.
“We have a clear strategy to be really different in the marketplace, a multi-specialist proposition: venue finding and events, travel, rail, hotels. We were a very big venue finding agency and we had the desire to grow our event management business,” Elswood said.
“So we acquired Expotel. The profile was perfect - hotel accommodation, a diverse customer base, public and SME business, a good locational footprint and last but not least the acquisition bought Venues Event Management in Swindon – a very strong business with a good 50/50 mix of venue finding and events. In the MICE arena we’re about a £120m player and rising.”
Elswood defended the purchase of Expotel at £16m, given Phoenix Equity Partners funded the management buy-out of Expotel and the simultaneous acquisition of NIS Europe for an aggregate £38m in 2008. Industry insiders said the reason for Expotel's reduced value was because it had recently lost around £40m of contracts, including a large government contract.
“We bought it for a strategic reason. It added value to our proposition, it wasn’t an acquisition that was opportunistic. There are no ‘bargains’ as such,” Elswood said. “I don’t know what went in the past but central government did consolidate buying into two lots and a lot of agencies lost their slice of the pie. But there has been growth in the public sector in Expotel business - just not central government,” Elswood said.
The acquisitions mean the business travel portfolio, encompassing Capita Business Travel, BSI, Expotel and Venues Event Management, now numbers 900 staff - 150 of them in meetings and events - across nine offices in the UK.
When asked if the businesses would be pulled under one brand, Elswood told meetpie.com: “What we want to do is make it simple. We will look to go on and harmonise it into one business entity, underpinning our specialist skills.”
Elswood did not envisage there would be many job losses in integrating the businesses. “We are looking at all of our areas and where there is overlap that is just business. We are creating roles and recruiting as well.
“We are winning contracts in venues and events and a lot on the travel side – big corporates like Santander, Home Retail Group and Everything Everywhere.
“We’re spearheading this move. The venue finding contracts are lending themselves to natural control of the events side as well. Procurement has the confidence to introduce us to the marketing and events side of the business. Someone else’s margin isn’t embedded in our pricing for the customer. It’s a simpler process.”
Elswood said the next investing in technology is the next “natural step” rather than further acquisitions. “A focus on our technology is the big proposition – self booking tools and our internal meetings management tool. We can control our own destiny and distribution and shape our own way.
“One never says never, but we need to integrate Expotel and Venues Event Management into the strategic goal. We’ll always look for businesses that add value.”
Pictured: Trevor Elswood