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TripActions has acquired UK travel management
company Reed & Mackay from its private equity owners. The terms of the deal
are undisclosed.
Reed & Mackay was founded in 1960 and
is best known for its high-touch service for clients in the insurance sector and wider
financial services. Private equity company Inflexion bought Reed &
Mackay in 2016 in a deal rumored to have been worth around £170 million.
TripActions was founded by Ariel Cohen and Ilan Twig in California
in 2016 and recently secured
US$155 million in Series E funding, valuing
the travel and expense provider at US$5 billion. It recently announced Springer
Nature and Primark among its European client wins.
We see TripActions and Reed & Mackay coming together to really fuel what our strategy was before. The TripActions guys have amazing strength in marketing, sales teams and a great product. We are able to service their ambitions on a global basis.”
Reed & Mackay’s Fred Stratford
Danny Finkel, TripActions’ chief travel officer, told BTN
Europe, “We have had this laser focus on the user and on building a product, a
service and a platform that enable travelers, travel managers and CFOs to be
happy.”
He said, “Where we saw an opportunity [with the acquisition] is
really catering to C-suites, to executive assistants and to board members who
require that super high-touch, bespoke level of service and that really embodies
Reed & Mackay.”
Speaking to BTN Europe, Reed & Mackay
CEO Fred Stratford said that the deal was not a result of a fire sale because of
the pandemic hitting business travel volumes.
“We were financially well backed and we didn’t
have to do this deal. It is going to provide further opportunities,” said
Stratford.
“Inflexion have been great investors in
Reed & Mackay and they were the third private equity investment we had. They
had no intention of selling
now—the business was absolutely flying pre-Covid.
They won’t go hungry, that’s all I can say.”
However, BTN Europeunderstands from industry sources that there is a sizeable debt on the holding company’s balance sheet that the deal will plug.
Questioned
over what some might consider
an unusual marriage, Stratford said, “I think what is really exciting is
that we are so different. No one would really think it would make sense
but the
magic happens where you bring those together. Over the past few weeks we
have developed
a mutual respect about what each has achieved. This will be hugely
exciting for
the business and for the clients.
“It has become pretty clear that
the future is tech and digital. The world is changing in terms of
people’s thinking and how people have got used to working.”
In the short term, Reed and Mackay clients will see little change.
“I think it’s important to say that the Reed & Mackay
name is staying,” said TripActions’ Danny Finkel.
As well as high-touch service, Reed &
Mackay is known for developing its own technology.
“We are renowned for our high-touch
service but quietly renowned for our technology and that is often underplayed,”
said Stratford. “We are going to keep the ecosystem we
have—self-booking tool, mobile app, agent tool, all fully integrated—and
learn from some of the innovation that TripActions has made and modernize some
of our technology.”
Finkel added, “One of the things that has amazed us through
the process in getting to know Reed & Mackay has been getting to know their
technology. It is tremendous—everything from their agent desktop to their booking
tool. Over time, I think there are absolutely opportunities to bring those technologies
together.”
Over recent years, Reed & Mackay has
grown its presence with owned offices around the world. It is now in more than
40 markets, including Chicago, Dubai, New Delhi, Singapore and Sydney.
“We see TripActions and Reed & Mackay
coming together to really fuel what our strategy was before. The TripActions
guys have amazing strength in marketing, sales teams and a great product. We
are able to service their ambitions on a global basis,” said Stratford.
Stratford believes more consolidation is
inevitable.
“Good businesses are good businesses,” he
said. “I think the change that we are going to see in the marketplace is that strong,
innovative businesses are going to get bigger and stronger. Players that are established
and not prepared to change will decline.”
The news of the acquisition follows
yesterday’s announcement that Amex GBT plans to acquire Egencia. TravelPerk has
also raised a war-chest in its latest round of funding which many believe will
be used to make TMC acquisitions.
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