Australia-based online travel agency Webjet has entered into an agreement to acquire European online hotel service SunHotels for $28.4 million.
The acquisition is expected to be complete by the end of August 2014.
This move from Webjet comes just over a week after Expedia's decision to acquire Wotif (competitor of Webjet) for $658 million, although Webjet managing director John Guscic says his company's buy is njot in response to its rival's recent activity.
Established in 2002, SunHotels has a turnover of over $121 million and claims to have been profitable for the past eight years. The company's major markets are Scandinavia and the UK.
Webjet has a B2B online hotel aggregation business by the name Lots of Hotels. This brand was established in 2012 in Dubai and London with the vision of connecting travel businesses in Middle East and Africa. Percentage of revenue contribution of Lots of Hotels brand to Webjet's overall revenue is not disclosed.
Guscic says this SunHotels acquisition was part of its strategic plan:
"Over the last two years, we have articulated a strategic plan to grow our non-air businesses, both in the B2B and B2C space, and to expand our global footprint.
"The result has been the launch of Lots of Hotels in the Middle East in Feb 2013 and its successive expansion into 20 unique markets, the purchase of the Zuji in Asia Pacific in March 2013, the introduction of packages in all our B2C brands in 2013, and the creation of Webjet Exclusives in the Australia market in 2014.
"The acquisition of SunHotels demonstrates our continued commitment to our objectives of product diversification and global expansion."
When asked about the timeline by which the B2B business of Webjet could overtake the B2C division, Guscic says:
"From a Total Transaction Volume (TTV), it is not unrealistic to look three to five years down the track and see our rapidly growing B2B businesses being of equal size to our growing B2C businesses."