On the Beach Group is spending £12 million to take over smaller online travel agency rival Sunshine.co.uk.
Sunshine was described as “highly complementary” to On the Beach.
The deal will add about 200,000 customers to the 1.2 million customers currently using On the Beach.
Sunshine reported assets of £18.6 million and earnings [EBITDA] of £1.6 million in the 13 months to September 30 last year.
“The additional passenger volumes will significantly enhance On the Beach’s opportunity to drive an increasing proportion of business into exclusively contracted product and an ability to leverage incremental margin,” the company said.
On the Beach chief executive Simon Cooper said: “We are delighted to have acquired a brand as well-established with beach holidaymakers as sunshine.co.uk.
“This earnings enhancing transaction reflects the board’s ambition to consolidate On the Beach’s leading position in the online beach holiday space while supporting our drive to exclusivity and underpinning our ability to further leverage our scale.”