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Kuoni India planning to acquire two mid-size cos for upto Rs 300 crore

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Monday, September 26, 2011, 11:00 Hrs [IST]
Kuoni India planning to acquire two mid-size cos for upto Rs 300 crore

By TBM Staff | Mumbai


Swiss tour and travel operator’s fully-owned Indian subsidiary, Kuoni Travel Holding or Kuoni India, plans to purchase two mid-sized companies in the next three months for anywhere between Rs 200 to 300 crore, a senior company official said. The acquisitions are part of the company’s strategy to create a strong presence in India, rather than relying on small offices across the country connected to the main office in Mumbai. “We are looking at acquiring mid-sized specialist travel companies with a strong local presence and knowledge about the world,” said Rajiv Duggal, Managing Director, Kuoni India. Duggal, who became Managing Director of Kuoni India in May 2011, hinted at acquiring family-run travel companies with strong professional management.

“It is difficult to create specialisations within the company and hence, acquisitions in north and south India will help the company grow faster. We want to be as strong in every region in India as we are in the West at the moment,” he added. According to him, the acquisition in the north will be able to handle requirements in the east as well. The travel operator is planning to announce the first of the two acquisitions in October. “The target companies should have sound financial health, a balance sheet that will lift our company and an operating margin anywhere between 12 per cent and 14 per cent,” Duggal said. Kuoni India has an operating margin of 10 per cent for its tour operating business at present, according to a report by Shweta Bhanot in The Financial Express.

According to analysts, developing a strong network is crucial for tour operators. PR Srinivas, Head - Travel, Hospitality and Tourism, Deloitte Touche Tohmatsu India, said, “The biggest challenge for large tour operators in the country is to strengthen their network in order to expand their market penetration.”

Kuoni India has grown in the country through acquisitions. In 1996, the tour operator purchased outbound travel operator SOTC and in 2000, bought New Delhi-based Sita World Travel, India’s largest inbound travel company with a strong presence in Northern India.
 
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