Partner Article

Isis Equity backs management buyout at Key Travel

Key Travel is planning to expand following a management buy-out which partly funded through a £9 million investment by private equity firm ISIS Equity Partners.

A travel management company which specialises in providing travel for the not-for- profit, academic and faith sectors, Key Travel has offices in Manchester, Liverpool, London and Edinburgh. as well as in Brussels and America. Turnover grew to £75m in 2011 and is predicted to reach £97m this year.

The company confirmed that founder Ajaya Sodha will step down from his role of chairman but will retain a “substantial financial stake in the business”.

Key Travel’s current chief financial officer Spence Knudson will take on the role of CEO with current CEO Steve Summers leaving the company “to pursue other personal ambitions”.

Ajaya Sodha said: “After 30 years in the front seat on the Key Travel journey, I feel that the time and the place has come for me to take a back seat and let a new generation of leaders take the controls.

“Customers and staff will benefit from the investment that ISIS will bring and ensure the long-term future of the business. Key Travel is now stronger than it has ever been, the future looks very exciting.”

Key Travel stressed that would be “no operational changes for either customers or suppliers” and the company would continue to focus on the non-profit sector. ISIS already has a stake in fellow TMC Reed & Mackay following a £4.9 million investment made in 2005.

Spence Knudson added: “We considered a number of investment proposals, but chose to partner with ISIS because they had a genuine affinity with our business, and the sector we serve.

“ISIS brings a wealth of strategic expertise and knowledge having already completed similar investments in both travel and non-profit sector support businesses, and we are all eager to mobilise our future plans with them by our side.”

Key Travel, which was set up in 1980 is ranked as the 19th biggest TMC in the UK with gross sales of £79.4 million in 2012, according to BBT’s list of the 50 Leading TMCs, although Key is predicting that it will make sales of more than £100 million during this year.

Pete Clarke and Nick Holder, both from the Manchester office of Isis, led the deal and Clarke and Bevan Duncan, from Isis’ London office, will be joining the board at Key Travel.

Pete Clarke said: “When the opportunity to invest as part of the MBO came along we were keen to be able to play a part and support Spence and the team in the next chapter for Key.

“We are already looking to invest further capital to support the ambitious growth plans of the business and have a number of potential acquisitions in our sights.”

Neil Price and Kate Grimoldby, from the northern acquisition team at Lloyds Bank commercial, provided leveraged debt to support the transaction.

This was posted in Bdaily's Members' News section by Simon Malia .