Indian-based tour operator Cox and Kings (C&K) has sold LateRooms.com for £20 million, less than six months after buying it from TUI Group for only £8.5m.
TUI Group declined to specify how much it got for LateRooms when the sale was announced in October, with C&K confirming the £8.5m in a statement to the Bombay Stock Exchange.
It is worth remembering that LateRooms was bought by First Choice - which merged with Thomson to form TUI Group in 2007 - for £108 million in 2006.
No wonder TUI kept quiet about only getting £8.5 million.
The new owner of LateRooms is Malvern Enterprise UK Limited.
As part of the announcement, C&K also said that it has bought a 49% stake in Malvern for £6.37 million.
The other 51% of Malvern is owned by a European private equity investor.
Malvern was only incorporated in the UK this March, according to its Companies House page. Peter Kerkar, a director of C&K, is one of Malvern's two named directors.
A third deal is revealed in the statement. Malvern has also bought short breaks specialist Superbreak from Holidaybreak. C&K owns two-thirds of Holidaybreak, and Holidaybreak will get £9.5 million from Malvern for the Superbreaks business.
The separation of LateRooms and Superbreak into a new business is explained as follows:
"The transaction will enable Malvern to independently follow its own strategic path to growth in the underpenetrated city breaks market within the online package-tour space.
"LateRooms and Superbreak are likely to gain substantially from a unified management team under the strategic guidance of the private equity investor and C&K."
LateRooms is still in the red, but only just. C&K's financials which covered the three months to end-December 2015 showed that LateRooms- which is bought at the start of the quarter - recorded an EBITDA loss of R9.5 crores which equates to around £1 million.
At the time, C&K also said that "higher offline brand spend combined funded (sic) by lower web marketing/distribution costs will be the cornerstone of LateRooms' strategy going forward."
C&K's conviction that city breaks is an underpenetrated online sector might raise some eyebrows in the UK and across Europe - OTAs such as Expedia have been promoting city break packages for some time while most of Europe's leading airlines also have a city break capability.
It will be interesting to watch how Malvern builds the business and, specifically, what brand it will use. laterooms doesn't say "packages" so Superbreak would be the more obvious choice if it sticks with what it's already got.
There might be a hangover from Superbreaks' pensioners-coach-tours-of-the-Cotswolds early days, but if anyone knows about keeping a brand fresh and up-to-date it is C&K - it is arguably the world's oldest travel business and is able to trace its roots back to 1758.
Cox & Kings pays just £8.5 million for LateRooms from TUI (Oct 2015)
TUI looks to one brand future, puts LateRooms up for sale (May 2015)