Iya Magen is CEO of Talma Travel Solutions which has completed the acquisition of UK travel management company Blue Cube
Israel-based Talma Travel Solutions has acquired travel management company Blue Cube, adding to its UK presence as it pursues
ambitious growth on both sides of the Atlantic.
Blue Cube was founded in 2003 by Mel Phaure and Kenny
Stirling and serves customers in a range of industries including technology,
communications and financial and legal services.
In addition to Norad and Blue Cube, Talma has also invested
in Brickell Travel in the US and in several tech start-ups within the last two
years, including hotel booking platform Arbitrip.
BTN Europe: Talma Travel Solutions acquired the Norad Travel
Group two years ago and now Blue Cube, another UK TMC. What drew you to the
latter?
Iya Magen: For us it starts and ends with people. We met Mel
[Phaure] and Kenny [Stirling] two years ago and it was an immediate click. That
was important as we were going to be partners whereas in Norad’s case we
acquired the entire company. In this case we are merging and partnering with
them. There were great vibes there and they are doing exactly what we’re doing
in our other firms – concentrating on corporate travel, working with high-end
customers, providing a white glove service. This is part of our strategy of
global expansion. We are looking to partner with companies who can accommodate our
worldwide customers and global tenders, and Blue Cube are a great match for
that.
BTN Europe: Are there any immediate plans to rebrand either Blue
Cube or Norad?
Iya Magen: We are keeping two brands for now because we
believe it is best to see how things are going. We are concentrating on being
able to provide the proper service to customers. Names are not that important
and we are taking our time with that, keeping each company under its original
name for now.
BTN Europe: How will the companies be brought together in
the background?
Iya Magen: The group will be entirely managed by Mel, Kenny
and us. There will be four directors. Mel and Kenny will be on the ground and
taking more of a part in the day-to-day management but we also have Norad’s directors
– the finance director and operations director. Our main priority is to maintain
the same levels for customers, to enrich what can be done better, and to
explore all the synergies. We’re taking it slowly to start with.
BTN Europe: Explain a little more about the timeline and
structure of the deal.
Iya Magen: We first met with Blue Cube two years ago but where
Talma originates [Israel] we have had some things going on that made us move slower
than we’re used to. But since the decision was made [to acquire], which was
earlier this year, it actually took around six months to get it done. Norad
took us a year. This deal was actually much more complicated because it was a
merger, not just an acquisition. Norad was acquired in full and it was our
first acquisition in the UK, so it was from scratch. What we’re doing now is
merging two companies. Norad acquired Blue Cube and the deal was based on both
shares exchange and on cash. We are partnering with Mel and Kenny in Norad
which is the holding company for Blue Cube.
BTN Europe: Talma's focus seems to be squarely on the UK and US corporate travel markets – explain why.
Iya Magen: Yes, that's correct. For a global presence, they are the
two main markets. Norad also has a licence to operate in Germany and Switzerland,
Blue Cube has a licence to operate in Ghana, and our US entity [Brickell
Travel] has offices in Mexico and Colombia. So yes, we are concentrating on the
UK and US but they usually come with additional, smaller presence in other
countries too. We are also now starting to work on another deal in the United
States. We are looking to create a much more significant presence from a turnover
point of view in both countries [through future acquisitions].
BTN Europe: What is the ultimate goal then for Talma’s
presence in those markets?
Iya Magen: We are looking to be in the top five UK TMCs
within the next two years. It is trickier in the US because it is such a
fragmented market and also so big, but we are aiming for $1bn [in turnover] which
is completely achievable in the next two or three years.
BTN Europe: There’s already been a lot of mid-market
consolidation among TMCs in Europe, particularly in the UK, how does that
affect your ability to grow rapidly through acquisitions?
Iya Magen: There are still lots of opportunities. Not every
deal is the right thing to go ahead with. It has to be the right fit [for us]
to go ahead with it but it is achievable. It becomes a bit more complicated
with each deal because when you already have a business up and running it becomes
a little bit more complex [merging it in] which we’re seeing with this current
deal. But other than that it is definitely achievable and it’s the right time
to do that. The Amex GBT-CWT deal is on a different scale. For us it’s not so
much about the size but about our approach – we must be big enough to serve and
small enough to care.
BTN Europe: What about customers – are you targeting the SME
market? And is that online or offline business, or a combination?
Iya Magen: Yes, we’re focusing on SMEs. The amount of
unmanaged travel in the US is significantly higher than in the UK. Blue Cube
and Norad are both hybrids of offline and online [service]. We are able to offer
the most advanced online solutions but also the good offline service depending
on the customers’ needs.
BTN Europe: You’ve mentioned an additional acquisition that
is due to close in the US, but is there anything in Europe in the pipeline?
Iya Magen: We keep our eyes open for any opportunities and
it is much easier for us to do business here [in the UK] because we already
have a team here. Starting in a new place would be more complicated. As I said,
our UK presence allows us to deliver solutions in Europe too and we don’t
really see a need to make any European acquisitions unless it is something
worth looking into.
BTN Europe: Tell us about Talma’s background and wider
strategy.
Iya Magen: We’re an Israel-based company working in travel
tech. We have four shareholders: two of them are major holding groups in Israel
– one in the car leasing industry, the other one in real estate. We are looking
to expand globally and in parallel we are working on travel tech solutions.
That’s why two previous acquisitions were online booking solutions: Arbitrip
for hotels, which is in the UK and used by several TMCs, and the other one is
an online travel agency called Book A Flight and they as well have a UK domain.
Those companies are fully tech, and the R&D departments are currently developing
a desktop agent tool where we’ll be aggregating all available content. Now that
we have numerous IATAs all over the world and lots of NDC content it will all
be aggregated in this platform using the developers at those start-up companies.
Around 80 per cent of our business is corporate and 20 per cent is leisure.
BTN Europe: What about a corporate-facing online booking
tool?
Iya Magen: In the next stage we will be looking into online
booking tools for corporations but this is something yet to be defined. Whether
we need to go there, whether that is the right thing to do… there are already many booking tools, so maybe
it’s just about being able to offer any tool rather than sticking to one
particular. We are keeping our options open.
BTN Europe: Talma’s previous deals have taken a range of
forms…
Iya Magen: Norad was a complete acquisition. We had
partnered with them for a long time so we wanted to make sure the directors
were onboard with us acquiring the whole company. With Brickell we have a
controlling stake. Arbitrip is majority owned; we have 80 per cent and the rest
is owned by the founders and that is important as a tech company. They are the
developers so it’s important for us to have them onboard with us. Usually our
approach whenever we are making a global acquisition is to acquire the
controlling stock to make sure our partners are onboard with us to run the
business.