Tourism is expected to be one of the hot sectors on the Tel Aviv Stock Exchange (TASE) offerings market in the coming year, given the boom in the sector and the successful IPO by hotel company Fattal Holdings two years ago. The rapid growth in Fattal's market cap and business left a good taste among TASE investors.
One group trying to jump on the bandwagon is leading Israeli tourism company Talma Travel and Tours, controlled by Talma and Erez Shmul. The company is currently preparing for its IPO on the TASE, which Poalim IBI - Managing & Underwriting and Discount Capital Underwriting are slated to lead.
The IPO is still in its initial stage; no agreement with the underwriters has been signed yet. Capital market sources said that Talma was planning to raise NIS 150-200 million at a company valuation of NIS 500-600 million, and that the IPO would get underway between May and August, if not later.
Acquisition contingent on successful IPO
Sources inform "Globes" that as part of its planned IPO, Talma will acquire the Smartair flight search website for NIS 40 million. The acquisition is contingent on the IPO's success, with NIS 15 million of the acquisition price to be paid in the acquiring company's marketable shares.
Smartair, managed by founder and CEO Erez Bousso, was founded in 2015, and quickly became one of the leading players in the local tourism market. The company's advanced technological capability, its substantial investment in marketing in a competitive market, and its high level of customer service, quickly brought Smartair's sales to hundreds of thousands of tickets a year.
In July 2019, Smartair reported that it had completed a $6 million financing round, with participation from Talma, Alpha Capital, and international venture capital funds. It was reported during the financing round that Smartair and Talma would jointly found a company for establishing and managing tourism websites in Israel and overseas, based on the advanced platform developed by Smartair. The new company will manage the Smartair website and other websites in Israel, as well as websites that it has launched in South Africa and other places.
Objective: Speed up transition to online reservations
The financing round announcement stated that Smartair had spotted an opportunity in developing markets in which the growth in reservations of tourism products on the Internet was growing by leaps and bounds each year, while 80% of tourism service reservations were still being made through travel agents.
Smartair's objective is to speed up the transition in Africa, Eastern Europe, Latin America, and Asia to online reservations by establishing local websites in cooperation with local tourism concerns. These websites, which are based on technology developed by Smartair in Israel, offer flights, hotels, and packages that include flight, hotel, attractions, and a rented car, quickly and conveniently, using an algorithm that automatically assembles the offer best suited to the customer's characteristics.
Talma, which is particularly strong in the business sector, has 37 branches and 500 employees. Two years ago, Talma Shmul transferred ownership of the company to her son, Erez Shmul, an aggressive manager described as a hungry young man buying everything that moves.
One of Erez Shmul's successful acquisitions was the Alice website, the current leader in Israel in online flight ticket sales by a wide margin over its competitors. Talma later acquired Eshet Business, the business arm of Eshet Tours, as well as several independent agencies, and continued growing.
Published by Globes, Israel business news - en.globes.co.il - on January 13, 2020
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