Affinion to acquire travel and loyalty solutions provider
All cash transaction valued at US$135m
US customer engagement solutions company Affinion Group has signed an agreement to acquire Connexions Loyalty Travel Solutions.
Connexions is a division of Travel Leaders Group, and provides leisure travel booking services and technology for the administration of loyalty programmes.
The all-cash transaction, valued at around US$135m before certain purchase price adjustments, is expected to close during the summer of 2010 pending regulatory approval. It is anticipated that the Connexions’ management team and associates will continue to work with the combined company.
Connexions provides its clients with a fully customizable, online platform for the redemption of loyalty points. With this platform, consumers who hold loyalty rewards points log-on to a client-branded website to book reservations across all categories of travel services, including air, hotel, car rentals, local attractions and cruises.
The Connexions’ proprietary platform also incorporates tools for the searching and booking of reservations, and accommodates the use of points, cash, or a combination of both for payment.
The platform can also be offered to non-loyalty clients under a white-label format to incorporate secondary travel products into standalone websites, integrating the purchase of hotel and car reservations into the purchase of airline tickets and providing a competitive alternative to existing bundled-package websites.
“The acquisition of Connexions aligns very well with our strategy, as their products are a natural extension of our abilities in the management of points programs and improves our positioning in the very competitive travel reservations market,” said Nathaniel Lipman, Affinion’s chairman and CEO. “Although this acquisition upgrades both the technology and functionality of our loyalty and travel services, we also expect to benefit by adding a highly experienced team of travel and loyalty professionals who bring extensive knowledge and critical relationships to the table as well.”
Affinion expects to finance the transaction with available cash on hand, and says the acquisition is expected to be approximately “leverage-neutral” to the company.