Serko buys Arnold Travel
Online travel booking business Serko has bought Expedia's Arnold Travel Technology for a confidential nominal sum, which it expects will boost its Australasian transaction volumes by at least a fifth.
The all-cash deal is expected to increase sales by 7-8 per cent in the six months ending September 30, though isn't likely to increase earnings until the second half of the 2016 financial year, Serko said.
Those forecasts rely on Auckland-based Serko retaining most of Arnold's existing client base.
"This is an important strategic investment for Serko given we now expect around $US4 billion ($A5.06 billion) of Australia's corporate travel spend to be booked through Serko's platforms," chief executive Darrin Grafton said.
In March, Serko warned annual revenue will likely be between 4 per cent and 6 per cent below the $US11m prospectus forecast for the year ended March 31 as some payables were pushed out into the following year.
It was also downbeat on the prospects for 2016 due to the strength of the New Zealand dollar and delays to its mobile product, which it anticipated would trim 8 per cent from its forecast for sales of $US8.3m in the six months ending September 30.
Last year Serko raised $US17m in new capital selling 15.5 million new shares at $1.10 a piece, via an initial public offering to fund its growth ambitions and repay debt.
Founders Mr Grafton and Bob Shaw sold a further $5m worth of shares into the offer, retaining about a 20 per cent stake and have agreed not to sell any more shares until two days after Serko announces its 2016 annual result.
The company will announce its 2015 annual result on May 22.
The shares last traded at 94 cents, and have dropped 18 per cent this year.
