Despegar buys Best Day and closes the largest acquisition in the Latin American travel industry

Despegar.com, Corp., the leading online travel company in Latin America announced today that it has agreed to acquire Best Day Travel Group ("Best Day") one of the leading travel agencies in Mexico, for a total consideration of approximately US $ 136 million, subject to the occurrence of certain commercial conditions.
A portion of the purchase price is paid on a deferred basis and includes a variable component of up to approximately +/- 10% of the total consideration, based on future performance.
According to Best Day, during 2019 the company recorded estimated unaudited pro forma revenues and an EBITDA of approximately US $ 140 million and US $ 8 million, respectively, with online sales representing approximately 70% of total sales. Approximately 75% of its income is generated in Mexico, further strengthening the presence of Despegar in this country. The remaining income is generated mainly in Brazil, Argentina, the United States and Canada, among others. Packs, hotels and other travel products represent approximately 95% of revenues.
Best Day operates a multiplatform business model. In addition to its Consumer Business operated through its online platform, call centers and approximately 190 kiosks, located mainly in Mexico, the company offers ground transportation, tours and activities through the main destinations in Mexico.
On the B2B front, Best Day offers wholesale online travel products to agencies around the world through its subsidiary HotelDO, as well as white label services for major travel providers. In addition, Best Day maintains exclusive alliances with the largest Mexican airlines. Takeoff expects to maintain the Best Day brand, network of kiosks and key executives.
The CEO of Despegar, Damián Scokin, commented: “We are very pleased to have concluded this agreement with Best Day, which is aligned with the strategic priorities developed on the recent Takeoff Investor Day. This is a significant milestone in our consolidation strategy initiated with the acquisition of Viajes Falabella. On the other hand, this acquisition is important to consolidate our objective of expanding our operations in Mexico, the most important tourist market in Latin America and the seventh most important destination worldwide. Together, the confluence of Despegar's unique competitive levers combined with Best Day's experience in wholesale hotel deals and destination services will further strengthen our value proposition.
Best Day also has strong partnerships with leading travel providers. We are acquiring a company with a solid strategic position and a successful track record, which gives us significant opportunities to strengthen the presence of Despegar in Mexico and grow its business value proposition to the Client. "
Julián Balbuena, Chairman of the Board of Directors of Best Day Travel Group, said "In Best Day Travel Group we are very proud of this operation. We have been operating in the market for more than 35 years, and that a company like Despegar, leader at the level Regional, see in us an opportunity for growth and consolidation in the Mexican market, speak clearly of the capabilities that we have been able to develop.For the Best Day Team, it is an opportunity to strengthen those capacities to continue offering customers unique experiences from the hand of the tourism company that has innovated like no other in the region in the last 20 years. "
The transaction is subject to the usual closing mechanisms for transactions of this type, including the approval of the corresponding free competition authorities. The closing of the transaction is expected to take place during the first half of 2020.