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Investment funds vie for travel agencies

In 2005, a medium-sized agency acquired Tiriac Travel, part of the group owned by Ion Tiriac. Last year, the same agency attracted a Danish investment fund, which is in search of acquisitions to gain the second or third position on the business travel market.
"When we entered the market in 1998 it appeared to be that the market leader at that time, Marshal Turism, was unbeatable," says Florin Tancu, manager of ING Development, a travel company that operates under the Alto Tours brand.
Tancu means the chances the group he runs has of becoming one of the top three travel agencies. The current number one is Happy Tours, an agency that its founder Nicolae Demetriade sold last year to Spanish investment fund GED.
At present, the group run by Tancu is divided in two: his agency, Alto Tours, in which he holds the majority stake, and the Romanian office of Weco Invest A/S, the Danish group that bought 25% in Alto Tours last year, which is its only operation in Romania. Weco targets growth in Romania primarily through the acquisition of the majority stake in Alto Tours.
"We are in talks to sell a further 49% in the agency and a final decision will be made in several months," says Tancu. In parallel, he acts as Weco's representative in Romania and is looking for other agencies to buy, particularly medium or small agencies that operate on the business travel segment.
Was it worth buying Tiriac Travel? Tancu firmly believes so: in 2006, Alto Tours' turnover was in excess of 7m euros (from 3.8m in 2005), while net income stood at 270,000 euros, an increase that would have been hard to achieve organically.
Tancu believes the travel market has started to follow an irreversible trend towards maturity.
Another group that arrived in Romania and remains active on the market is GED Capital Fund II, which acquired Happy Tour in 2007. GED's manager, Robert Luke, says his fund plans to buy another 4 business travel agencies this year, which will create a strong group that is able to retain its position as market leader.
It is not only financial investors that are looking at the Romanian business travel market, which is expected to grow by 15-20% this year from over 400m euros last year, but strategic ones as well.
However, their policy is different, as they prefer organic growth.
Malin Malineanu, manager of New Concept Travel, the official partner of American Express in Romania, considers the arrival of a rising number of foreign companies in Romania will significantly boost the company's turnover.
It is not only American Express that is already present on the market. The other major global groups, such as Carlson Wagonlits and BTI, have already sealed partnerships with Romanian agencies, which will support an important network of global customers.

Travel market
Weco targets domestic growth primarily through the acquisition of the majority stake in
Alto Tours
Spanish GED Capital Fund II, which acquired Happy Tour in 2007, is still active on the market
Not only financial investors target the Romanian business travel market, but strategic ones also

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