LBO France buys troubled Fram for Karavel merger

The court's go-ahead will lead to a merger between Fram, Plain Vents and Karavel-Promovacances, a Parisian travel agency LBO France bought from Equistone and Euromezzanine in a €200m SBO in April 2011.

According to LBO France, the combination of all three assets will result in a group representing a combined 1,100 workforce and a potential €700m in sales.

The merged companies will look to benefit from the synergies between their focus markets: Fram and Plein Vent are familiar with destinations such as Spain and Croatia, while Karavel has traditionally been active on long-distance journeys such as Mexico and Dominican Republic.

As part of the changes, a joint buying scheme will be set up by all three corporates to speed up the buy-and-build process, with plans to purchase air transport, hotels and intermediary operators.

The acquisition will be financed via LBO France's White Knight fund family, focusing on French assets valued in the €100m-2bn range.

Revealed in early November, the confirmation of LBO's interest for Fram emerged as the business was put into receivership by Toulouse's trade court, shortly after suspension of payment was declared.

At the time, LBO stated work was underway for all of Fram's part-time employees and 356 of those working full-time to keep their jobs; this represents 77% of the company's current 2,000-strong workforce.

In addition, talks were initiated with the French tourism industry body to ensure the business retained its existing client base, according to the firm.

LBO France's announcement followed the decision by Chinese aviation corporate HNA on 18 October to pull out of the process, one week after presenting a bid for Fram that the French press valued at €10m.

LBO's acquisition of the French tourism asset come five months after the GP divested its stake in tour operator Cityvision via the sale of the company's SLT and SELT divisions to RATP, and that of Cityvision and La Marina de Bercy to Ekkio Capital. 

Company
Founded in 1949 and headquartered in Toulouse, Fram is a tour operator providing hospitality, transportation and distribution services to the tourism industry.

The group resulting from the company's merger with Plein Vents and Karavel is expected to employ 1,100 staff and generate approximately €700m in sales.

People
LBO France was represented by director Eva Hoël. Alain de Mendonça is president of Karavel.

Advisers
Equity - Benoit & Associés, Cyril Benoit (Corporate finance); Racine Avocats, Laurent Jourdan (Legal).

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