HotelPlanner, a hotel and event booking technology platform, Reservations.com, a premier online travel agency, and Astrea Acquisition Corp., a publicly traded special purpose acquisition company, announced that they have entered into a definitive three-way merger agreement for a business combination. Through this transaction, HotelPlanner, with its family of brands including Meetings.com and Reservations.com, plans to leverage its 1+ million hotel room and alternative accommodation inventory and proprietary booking engine to unlock synergies across the travel ecosystem. The transaction is expected to position the combined company to capitalize on expected increased demand for individual, group, and corporate travel and to invest to drive accelerated growth, expand internationally and pursue attractive, well-timed, high-return M&A opportunities. Upon completion of the business combination, which is expected to occur in the fourth quarter of 2021, the combined travel technology company will operate as HotelPlanner, and will be listed on NASDAQ under the new ticker symbol “HOTP.”
A key business differentiator is HotelPlanner’s ability to deliver unique “Closed User Group” rates to customers. Closed User Group discounted rates are offered in unpublished, private sale environments and are available to members within groups such as weddings, reunions, tour groups, pro and amateur sports teams and leagues, private clubs, associations, business meetings and corporate travel. Closed User Group rates are complementary, not competitive, with Online Travel Agencies (OTAs) and deliver a larger proportion of higher-margin “Merchant of Record” transactions with fewer cancellations.
“As worldwide leisure and business travel demand rebounds in the coming months and years, we are in a prime position to rapidly grow our user base and revenue,” said Tim Hentschel, Co-Founder and CEO of HotelPlanner. “We see opportunities for accelerating growth both in the U.S. and globally as we unite two of the largest online booking websites on one highly efficient tech-forward platform, and combine it with the power of our Closed User Group rates. HotelPlanner is a dynamic and cycle-tested company with proven management, scalable proprietary technology, strong profitability, and preferred partnerships built over nearly two decades with 50,000 individual hotels, plus access to more than 1 million accommodation options we make available to our customers. Our technology investments have enabled us to remain ahead of the curve in the rapidly changing travel industry. Reservations.com is a leading global hotel booking website, with more than 1 million stays booked each year. Together, with our combined user base, global gig-based travel agents, brand reach, organizational efficiencies, and significant capital, we are in a prime position to shape the future of online travel booking.”
Felipe Gonzalez, CEO of Astrea Acquisition Corp., said “We are thrilled to partner with HotelPlanner and Reservations.com. We analyzed a lot of companies as part of our investment process, and HotelPlanner stood out to us as a unique platform with tremendous potential to benefit from access to public markets. In its nearly two-decade run, HotelPlanner.com has proven to be one of the most innovative, successful, and resilient travel technology companies in the industry, with steady growth nearly every year. In 2020, they successfully navigated through the pandemic and are now positioned to capitalize on the increasing demand for global travel. The combined HotelPlanner is on track to achieve record revenue in 2021, and we believe this transaction will provide the scale and capital to help further accelerate their growth trajectory and deliver exceptional shareholder value for decades to come.”
HotelPlanner.com launched in 2004 with a simple yet profound idea: to fundamentally transform the hotel booking space. Through organic growth and strategic acquisitions, HotelPlanner has consistently grown revenues and successfully managed through the COVID-19 pandemic, and is expected to be on pace to hit record revenues in 2021. Based on gross booking volume as of July 31, 2021, HotelPlanner is one of the world’s largest global providers of online group hotel bookings and a leading provider of individual hotel bookings.
In 2013, HotelPlanner.com acquired Meetings.com, which successfully diversified the growing company into the online meeting and event booking market. Meetings.com focuses on business travel and helping corporate event planners book meeting space plus hotel rooms. Through direct relationships with leading meeting and banquet venues around the world, Meetings.com quickly finds clients the perfect space for the best value.
Reservations.com launched in 2014 and has quickly grown into one of the most recognized hotel booking brands in the U.S., with more than 1 million hotel stays booked on their site in 2019. Led by an experienced management team of hospitality and technology industry veterans, Reservations.com offers competitive deals to leisure and business travelers.
Once combined with HotelPlanner, Reservations.com will continue to scale its platform to provide a highly personalized booking experience by utilizing HotelPlanner’s global gig-based customer service platform. Additionally, the shift of Reservations.com’s offline bookings to HotelPlanner’s higher margin Closed User Group rates is expected to create additional revenue opportunities.
The transaction implies a pro forma company’s enterprise value of $567.1 million, or 3.3x HotelPlanner’s estimated 2022 revenue of approximately $170 million, and an implied equity market capitalization of approximately $687.9 million. The transaction is expected to provide HotelPlanner with more than $120 million in cash proceeds to its balance sheet, assuming no redemptions, to drive business performance and accelerate organic growth through investments and technology developments in artificial intelligence, machine learning, onboarding of gig-based travel agents, innovations and API services, and selective acquisitions.
Existing HotelPlanner and Reservations.com owners have agreed to roll-over approximately 93% of its ownership and expect to retain approximately 68% ownership following consummation of the business combination. Secondary proceeds of $35 million are primarily intended to effectuate the transaction between Reservations.com and HotelPlanner.
The transaction will require the approval of the stockholders of Astrea, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close in the fourth quarter of 2021.
Additional information about the transaction, including a copy of the investor presentation that will be used by the parties to describe the transaction during the conference call discussed below, will be provided in a Current Report on Form 8-K to be filed by Astrea with the Securities and Exchange Commission (“SEC”) and available at www.sec.gov.
Management and Board of Directors
Upon completion of the transaction, the management of the combined company will be led by Tim Hentschel, HotelPlanner’s Co-Founder & CEO, who will also serve as Chairman of the Board of Directors, and HotelPlanner’s Co-Founder John Prince, who will serve as Chief Information Officer. The senior management team will also include Joe Groglio, Chief Financial Officer, Bruce Rosenberg, Chief Operating Officer, Leticia Piloto-Rodriguez, Chief Legal Officer, and Philip Ballard, Chief Communications Officer & Head of Investor Relations.
Reservations.com Co-Founders Yatin Patel and Mahesh Chaddah will also become part of HotelPlanner’s management team and will be instrumental to the merged company going forward.
Upon completion of the transaction, the surviving company’s non-employee Board of Directors is expected to also include:
- Gianno Caldwell, Fox News political analyst
- Jeff Goldstein, former President of Pricegrabber
- Dieter Huckestein, former Chairman/CEO of Conrad Hotels and former Chairman of the American Hotel & Lodging Association
- Mohsen Moazami, former President of Cisco Systems
- Dylan Ratigan, former MSNBC host of “The Dylan Ratigan Show”
- Kate Walsh, Dean of the Cornell University School of Hotel Administration
- Jim Wilkinson, Chairman/CEO, TrailRunner International
Tim Hentschel, John Prince, Yatin Patel, and Mahesh Chaddah will also serve on the Board.