Travelzoo Inc. has signed a letter of intent to sell its Asia Pacific division to a company to be formed by Travelzoo’s non-executive chairman, founder and majority stockholder Ralph Bartel.
The letter of intent is non-binding, however, meaning Travelzoo can solicit alternative offers for the Asia Pacific division and enter into negotiations for a more favorable offer. Travelzoo offers deals to travel enthusiasts in the U.S., Australia, Canada, China, France, Germany, Hong Kong, Japan, Spain, Taiwan and the U.K. through its newsletters and online services.
Should Travelzoo sell the division to Bartel’s company, Travelzoo would receive a cash payment at closing along with an option to re-acquire the divested operations at fair market value sometime in the future. As part of the transaction, Bartel’s company would receive limited licenses to portions of the company’s intellectual property to support its operation of the Asia Pacific assets as part of a standalone company.
“While we remain upbeat about business prospects in Asia Pacific, we believe we can currently create more shareholder value by redirecting and focusing our investments in other areas of the Travelzoo franchise where we see more compelling near-term growth opportunities, such as in Europe, North America, and our new Fly.com search engine,” said Holger Bartel, Travelzoo’s CEO, in statement. “Consequently, we intend to sell our Asia Pacific division.”
For the twelve months ended June 30, Travelzoo’s Asia Pacific division reported revenues of approximately $1.5 million and an operating loss of approximately $7.8 million.
The company has established a special committee comprised of Travelzoo’s three independent directors to oversee the sale process and advise the company’s board of directors.
Unless a suitor presents a superior offer, Travelzoo anticipates closing a transaction with Bartel “in a relatively short period of time,” according to a company statement.
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