Tour operators encouraged to follow in footsteps of Thomas Cook when scoping acquisitions

Research company Plimsoll recently conducted a survey in which it names just under 270 companies ripe for the picking through acquisition. An acquisition analyst encourages companies to follow the lead of operators like Thomas Cook and pay a little extra.

Senior analyst David Pattison, said that historically, operators choose to go after failing companies because they are usually only have to pay nominal prices. This may seem like a good cost-effective strategy in the short term, but in the long term says Pattison, it makes more sense to target stronger companies even if they cost more to acquire. The reason for this is that businesses which are already successful would not require revitalisation. As these businesses already employ successful strategies they would run and drive themselves forward. For failing businesses, the acquiring operators mostly incur costs and spend time and effort into rebuilding.

Thomas Cook bought hotels4u earlier this year in a deal reportedly worth
₤21.8 million. Hotels4u, an online accommodation and booking website was founded in 2003. It is run by an experienced team of professionals and services around a half a million customers a year.

Pattison feels that it is deals like the one between Thomas Cook and hotels4u that are in both parties best interests. However, he also believes that the acquisitions of failing companies do help the overall market. He went on to say that if the development of the travel and tour industry is to grow, then there needs to be more acquisitions.

www.thomascook.com