Selling the business. Another insider story in the world of etravel 18/30. Travelstart 10 year anniversary.


God works
in mysterious ways and so does the world of flee markets that trade in selling
and buying companies. Businesses are a commodity that’s really hard to put a
price on. I read the other day that
Bushnells, chairman of Tapcode, the founder of “pong”, was offered to buy Apple
for 50.000 USD some 20 years ago. Yahoo declined to buy Google for 1 million
USD only some 10 years ago. Ericsson was offered to buy Nokia for close to
nothing some 20 years ago. Even Phil Knight wanted to offload Nike several
times in the early days when he was in a shitty mood. I have been no different.

I sold the company back in 2000 because I
was offered too much money. My plan was to invest in a new project. But the
shares I received, as payment got worthless after the buyers defaulted. So I
repurchased the business. After the restructuring and getting the company in
shape after three years I got fed up and wanted to sell again.

After short listing of possible candidates
we decided to go with Norwegian company HQ Norden in Oslo. They produced the
usual prospect hypi.jpgng our company and the growth prospectus of the Scandinavian
market. The prospect was sent to all possible and impossible companies. We got
some crap offers and some really nice cash offers, but nothing we felt
comfortable with. Time went and that’s not good when you want to sell. Its
probably like sharing bedroom with a woman when you know you are going to
divorce. Must be hellish. So it was for me but even more for our management
team. They didn’t know what to do: build or “dress the bride”.

Just when we were about to pull out of the
whole thing a serious buyer emerged. HQ had came up with this really brilliant
idea of buying out a fairly large corporate travel company called VIA travel group
that recently had done a somewhat poor IPO and was currently undervalued. They
had a small OTA arm with two brands. So HQ pi.jpgtched the idea to a small boutique
firm called FSN capi.jpgtal. And it went something like this (but in Norwegian);
Buy out all shares in VIA travel group. Delist from the stock exchange + buy
Travelstart. Split out the OTA business from VIA. Make Travelstart the
locomotive for the newly formed OTA business. Make a shitload from selling off
the OTA entity and then have the corporate arm for free and sell it off or
relist it. The FSN people liked it and went ahead but didn’t want anything to
do with HQ. Long nose, you have no friends in the capi.jpgtal market.

FSN acquired VIA travel group for 500 mill
nok and offered us some money for our shares. The offer sounded ok considering
I was sitting in South Africa and was restless. We had not yet launched in ZA and
the management team and me was not a happy couple any more.

The due diligence started and we are a quite
transparent company with careful book keepi.jpgng always with money set aside for
emergencies. So the buyer found more positive things than negative. They wanted
more and more documents. After six months of dealings our company was on its
knees. This greedy little Norwegian firm had sucked every inch of life energy
out of us. The final drop was when they asked me to start commuting between
South Africa and Oslo/Sweden as part of the deal to run the show. I kicked them
out. We lost a lot of positive momentum that took us a year to recover from.
The sad part of the story is that my manager and me parted in a bad mood and it
was all because of the bad blood that emerged during this extremely long due
diligence period.

What happened next was that the manager for
VIA´s OTA business, Martin Jörgensen, got fired by FSN. In fact they fired
everyone. He then went straight to another investment firm; NORVESTOR and
pi.jpgtched them the exact same idea that HQ pi.jpgtched to FSN: A Scandinavian OTA
roll up.

They bought the idea, put Martin on the
board who then tried to sell me the idea of being the locomotive in this roll
up. But I had had it by this time and suggested they should do Seat24 and
Swedish Travel Group, which they did. They are now called Etraveli. They
recently acquired the little that was left of VIA´s OTA business for close to

So in retrospect:

  • HQ didn’t get a cent for their great idea
  • Martin Jörgensen got his revenge
  • Swedish Travel Group and Seat24 founders
    made exit
  • FSN were too greedy and lost
  • I kept my company and we keep doing what we
    do best
  • Norvestor will make a killing when they sell

Some win some loose

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