This week Clarity Travel Management closed on the deal to acquire Portman Travel, creating the seventh largest TMC in the UK.
The two merged businesses will be led by current Clarity CEO Pat McDonagh, who told BBT the acquisition has been in the pipeline for a while, with plans to grow the company “aggressively”.
“We’ve been looking at a number of opportunities for quite some time now,” said McDonagh. “We have ambition to grow and we’ve had great success in that organically, but we also want to expand our horizons globally as the two businesses are very similar in culture and mindset.”
In BBT’s annual Top 50 leading TMCs, Portman were placed tenth with UK sales of £250 million, dwarfing that of Clarity’s £135 million, however McDonagh, who couldn’t disclose financial details, sees the deal as a “merger of two equals”.
“The perception out there is that it’s little Clarity acquiring Portman but actually it’s our holding company [Mawasem Travel and Tourism]. From a turnover perspective Clarity is catching up rapidly. We expect to finish this year on around about £193 million turnover which is up from around £130 million last year. So that’s significant.”
So as TMCs see drops in transaction fees and suppliers pursuing more direct bookings where will that growth come from? McDonagh believes it’s about focusing globally. “As a domestically focused Travel Management Company: An agency which manages business travel for a company. you reach a glass ceiling, but our customers have locations across the world and are looking for global clients so we had to address that,” he explained. “The US is going to be a major area of focus and Portman already has a number of important bilateral partnerships and obviously there is a large membership of [global consortium] Radius in the US.”
After any merger or acquisition there are always questions around jobs and what direction the newly-formed business will take. McDonagh said the focus is now on growth but admitted there will be “difficult decisions to be made” over the next few months.
“As far as jobs go the great news is that both businesses are in growth, so there’s an absolute need for quality resource. We don’t look at this as a cut and shut job because that’s not the approach. Throughout this process there’s going to be some difficult decisions to be made, but if we have to make those decisions we’ll do them in the right way, do them fairly and communicate to people properly.”
McDonagh was keen to stress the deal will have no affect on the relationship with the corporate travel buyer. “Right now continuity of service is what this is all about. A corporate client would have had a relationship with a Portman account manager and that will continue, likewise on the Clarity side of things.”
One final but important decision to be made is what the business will be called, something McDonagh hopes will be announced in the next “three to four months”.