Almost 10% of the UK’s leading tour operators are ripe for acquisition with more than half of their value wiped out in the past 12 months.
The grim findings from Plimsoll Publishing suggest that the current economic situation presents one of the biggest opportunities in a generation for companies in the sector with the cash and guts to invest.
The study, which rates the UK’s leading 1,000 tour operators on their acquisition attractiveness, found 93 companies “ripe for the picking” based on a scoring system incorporating financial strength, ownership, valuation and future potential.
The report claims time is running out for these 93 privately held companies, which are demonstrating a significant deterioration on the balance sheet.
The analysis comes just a day after Plimsoll revealed around 70 travel agencies could face similar circumstances.
Plimsoll senior analyst David Pattison said “rapid and deep cost cutting”, was required to get these companies back on track and predicted job losses of up to 3000 over the next 12 to 24 months as they drastically reduce overheads to survive.
Pattison described the 93 as “wounded animals” and said they were classic acquisition material despite a long and distinguished history in many cases.
“Anyone looking to grow their own company through acquisition should be looking for businesses that are currently undervalued yet, with help, can be turned around,” he added.
The downturn represents a massive opportunity for companies with cash to buy into a business unaffordable a year ago. Plimsoll has identified 486 companies in the industry with cash to spend, which could help the ailing businesses.