CNG Travel buys PlacesToStay for $12.5m

KENMARE-based CNG Travel snapped up a US hotel bookings company as part of its expansion plan.

CNG Travel, which floated on London's Alternative Investment Market earlier this year, said it would pay out $12.5 million (€10.1m) for PlacesToStay (PTS).

PlacesToStay owns eight websites that allow customers to book hotel rooms across the world. CNG said it is the fourth largest hotel room distributor business with access to over 5,000 destinations in 140 countries.

CNG said it will make an upfront payment of $12m for the company and a further $500,000 in three months time. PlacesToStay said it generated 243,000 reservations last year with a total value of $49.7m.

This yielded a $4.9m profits for the company before expenses.

CNG had turnover of $48m last year and operating profits of $2.5m. The deal will increase CNG's existing hotel inventory by 50% to over 24,000 hotels.

Finbarr Power, CNG's chief executive said yesterday: "PTS is a leading online hotel brand in the leisure sector and is an excellent first acquisition for CNG following our flotation this summer. Upon completion of the acquisition, PTS will be integrated immediately, creating for CNG an ideally balanced business between the corporate and leisure travel markets."

Mr Power said the acquisition would also change CNG's business mix from a predominantly corporate travel customer to the higher margin leisure sector.

He said the takeover of PTS will add to CNG's profits in its first year.

Shares in CNG Travel were flat yesterday, but have fallen by almost a 15% since they began dealing in May.

CNG is based in Kenmare and run by chief executive Finbarr Power, who formed the company in 1999.

Mr Power was the owner of International Translation & Publishing which he sold to Jim Flavin's DCC group for $5m in 1997.