UPDATE: GuestLogix has clarified that OpenJaw will maintain its product suite and will not be retired. Dan Thompson, SVP Global Strategy & Investor Relations, GuestLogix: "Yes, the OpenJaw brand will remain intact. There will be joint sales opportunities where both brands are used but GuestLogix will be the lead brand in any joint pitches. We will be flexible of course, should an opportunity seem to lean more towards leading with the OpenJaw brand."
Ancillaries just got even more interesting: Dublin-based OpenJaw Technologies has been acquired by fellow merchandiser and ancillary revenue technologist GuestLogix.
The total for the purchase is $41.2 million (plus other considerations), and will combine two prime merchandisers and ancillary revenue technologists under the GuestLogix banner.
In announcing the deal, GuestLogix President and CEO sees the value in the combo with the backdrop of rocketing ancillary revenues:
With industry experts forecasting ancillary revenue in the airline industry alone to grow by an additional $130 billion by the year 2020, we recognize that there is an insatiable need for a technology platform designed to unilaterally support ancillary revenue initiatives across a travel company’s entire operation.
The fusion of GuestLogix’ talent and best-in-class technology with the exceptional counterparts that reside within OpenJaw, introduces the industry’s first comprehensive ancillary revenue and retailing platform that will support all stages of the travel journey. This transaction puts us on an elevated growth trajectory and we are proud to announce this transaction as part of the Canadian technology sector.
On its website, Guestlogix outlined the following strategic reasons behind the acquisition:
Highly strategic acquisition enhances GuestLogix’ existing retail platform with best-in-breed web-based travel merchandising software used by global travel companiesComplementary technology platform broadens ancillary revenue-focused service offerings available to current and prospective customersExtends reach within the travel industry across all touch points (home, transfer, airport, onboard, hotel and elsewhere in destination) and all major verticals (airline, rail, bus, ferry, hotel, loyalty, online travel agency and car rental)Expands customer base to include premier Canadian brands such as Four Seasons Hotels & Resorts, Aeroplan, and AIR MILES / Loyalty OneAccelerates transformation of GuestLogix into a software-centric solutions provider focused on high margin, recurring revenueGuestLogix’ global presence is extended with offices in Dublin and Galway (Ireland), Madrid (Spain) and Kraków (Poland)Increases pro forma revenue and adjusted EBITDA by 64% and 251%, respectively, for nine months ending September 30, 2014Transaction expected to be immediately accretive on all key metrics including revenue, EBITDA and operating cash flow
The purchase adds 30 international travel brands to the Guestlogix portfolio. The deal is set to close no later than the end of January of next year.
NB: Euro banknote image courtesy Shutterstock.