The Helloworld Travel Ltd (ASX: HLO) share price has been on form again on Tuesday.
In morning trade the travel company's shares rose as much as 3.5% to $4.80 before dropping back a touch.
Why is the Helloworld share price on the rise today?
Investors have been buying the company's shares this morning following the announcement of a new acquisition. According to the release, Helloworld has agreed to acquire the TravelEdge Group.
The release explains that TravelEdge is one of Australia's largest privately-owned corporate travel management company, offering a full suite of services of corporate travel services. This includes travel management solutions, academic travel services, event and group planning and delivery, holiday and leisure services, and travel prizing and incentives.
Helloworld will be acquiring TravelEdge for a consideration of $28 million, which will be funded from a new bank facility. The consideration represents an FY 2019 EBITDA multiple of approximately 6 times.
There is also the potential for additional consideration to the vendors in FY 2021 if certain defined earnings thresholds in FY 2020 are satisfied. However, the additional consideration is not considered material.
Pleasingly, management expects the acquisition to be earnings accretive in FY 2020 and beyond.
The company's CEO and managing director, Andrew Burnes, said "We are very pleased with the addition of TravelEdge to the Helloworld Travel Limited business. This will allow HLO to expand in the corporate and education travel sectors and the business complements our existing corporate operations in Australia and New Zealand with additional expertise knowledge and capability."
"With nearly 20 years' experience, TravelEdge is a highly respected TMC business that generated over $300m of TTV in FY19. We will continue to provide outstanding services to TravelEdge's many clients across the corporate and education sectors in Australia," he added.
The chief executive also revealed that the addition of TravelEdge to its wholly owned TMC operations will lift is trans-Tasman corporate TTV on an annualised basis to approximately $1.55 billion in FY 2020.
Elsewhere in the industry today, the Webjet Limited (ASX: WEB) share price has rebounded after tumbling lower on Monday amid the Thomas Cook collapse, and the Corporate Travel Management Ltd (ASX: CTD) share price is up almost 2% on no news.
