Gulf Capital acquires wholesale travel company

Following this investment, the Abu Dhabi-based firm’s second fund is fully deployed

Gulf Capital has acquired multi-regional hospitality distributor Destinations of the World (DOTW) in a management buyout alongside the company’s senior management team, according to a statement from the firm.

The Abu Dhabi-based firm and the management team have together acquired 100 percent of the company. Post-transaction, Gulf Capital will hold a 57.5 percent controlling stake.

Financial details of the transaction were not disclosed. Gulf Capital declined to comment further on financials.

DOTW sells hotel room bookings to a distribution network of travel agents, online travel agents, airlines and tour operators. The company has achieved 95 percent penetration of the travel retailer agency market across the Middle East and North Africa region, according to Gulf Capital.

Gulf Capital chief executive officer Karim El Solh called the management buyout a “landmark deal” for the firm. “This was our largest management buyout to date,” El Solh said in a statement. “The accommodation wholesale sector is the fastest growing segment of the global travel market and DOTW has a solid track record of driving top-line growth and achieving significant scale economies.”

The global accommodation wholesale market is estimated to be worth more than $30 billion, and is forecast to grow at around eight percent per year over the next five years, according to Gulf Capital.

The investment in DOTW was made from Gulf Capital Equity Partners Fund II, a $533 million vehicle which closed in early 2010. Following this investment, Fund II is now fully deployed. In an interview with PEI last month, El Solh said at that point the fund had yielded a net internal rate of return of more than 25 percent.

In March 2014 Gulf Capital partially exited Gulf Marine Services through an initial public offering on the London Stock Exchange, netting a return of 10x and returning its entire second fund in the process, PEI reported earlier.

In October Gulf Capital closed its third buyout fund on its $750 million hard-cap. The vehicle was launched in late 2013 with a target of $550 million. The fund will be looking to make investments of between $60 million and $100 million in 10-12 companies over a five-year investment period. Gulf Capital itself committed $150 million to the fund, which enjoyed a re-up rate of more than 80 percent, El Solh told PEI at the time.