The board of directors of the Zurich-based Kuoni Group on Feb. 2 approved a $1.36 billion bid by the Stockholm-based EQT Partners private equity firm to purchase the company and take it private. Established in 1994, EQT is a business unit of Sweden’s storied Wallenberg family (Yes, it includes that Wallenberg, the revered Raoul Wallenberg, the businessman and diplomat who is widely celebrated for saving tens of thousands of Jews in Nazi-occupied Hungary during the Holocaust.). The family’s business presence and prowess in Scandinavia dates back to the mid-1800s and before, and includes enough different products and activities that it is estimated, by some published accounts, to control one-third of Sweden’s GDP.
According to EQT’s own posted information, the firm seems to prefer acquiring a business with an established history, growing it, increasing its size and number of employees and earning profits along the way. It does not seem to be the type of venture capital entity that buys troubled or under-performing entities and then selling them off in parts or shutting down units, in order to realize a profit or yield quickly.
EQT has some 60 companies in its portfolio. They are distributed worldwide, as are the locations of its industrial advisors and the nature of the individual units’ activity.
The selloff of Kuoni’s units has been the dominant story in the global tour and travel industry since January 2015, when the company announced that it European and Indian businesses (this includes Hong Kong) were for sale. Germany’s DER Touristik acquired Kuoni’s European brands, while the company’s operations in India and Hong Kong to Thomas Cook India, which is owned by billionaire Indian investor Prem Watsa‘s Fairfax Financial Holdings.
What remained for EQT to acquire were Kuoni’s three remaining areas of activity:
—Global Travel Services, which deals with Kuoni’s B2B offerings (this includes GTA) including its bedbank operations, ground transfers and sightseeing tours.
—Outbound and Specialists, which is focused on dealing with tour operations and destination management.
—VFS Services, which deals with visa processing and other inbound legislative enquiries.
Kuoni’s shareholders must still approve the proposal, but there has been no reported opposition to the move.