Helloworld Travel Ltd (HLO) was launched in 2013 after the consolidation of Harvey World Travel, Travelscene, Jetset and Travelworld. Its business name was changed to Helloworld Travel in 2017. HLO has now acquired Express Travel Group (ETG) for approximately $70 million.
“Given their similar business models, this acquisition makes strategic sense,” Raymond said.
“The price paid is attractive, there are material synergies on offer, it is highly EPS accretive (approx. 30% upgrades) and significantly scales Helloworld Travel Ltd’s ANZ business.
“Post this transaction, HLO’s balance sheet remains strong.
“Despite the sale of its corporate travel (to Corporate Travel Management), earnings will be higher in the future given recent acquisitions and structural improvements made to the business during COVID.
“Following this acquisition and assuming a full recovery from COVID, we now value HLO at $4.22 per share (approx. 51% upside from here).
“We maintain an Add rating,” Raymond said.
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