US giant scoops up Synergi

A company listed on the Nasdaq in the United States has bought Auckland corporate travel business Synergi Travel.

Synergi was at the centre of a bitter sideshow to the Gullivers Travel Group share float.

The buyer is Navigant International.

Synergi's New Zealand clients include Fonterra and Westpac, and its Australian operation has the federal Parliament travel account.

It is one of New Zealand's largest corporate travel businesses and also deals in sports tours.

The purchase price has not been disclosed, but a source said it was more than $40 million.

Gullivers founder and owner Andrew Bagnall initially touted a 38 per cent stake in Synergi as part of the Gullivers' assets to be sold last year by a trade sale or a share float.

But when investment bank UBS brought the share offer to market in November, the Synergi stake was nowhere to be seen.

Finance industry sources reported a falling out between Bagnall and the four Aucklanders who owned the other 62 per cent - Paul Hodgson, Ross Irving, Murray Reid and Tim Tapper.

The four were reportedly angry to see the business included in an information memorandum detailing the assets in Bagnall's sell-off.

Managing director Irving said the acquisition-hungry Navigant approached the company in about March last year and the deal was done on the evening of December 23.

The vendors had sold because of their ages - late 50s - and the good strategic fit with Navigant.

"We're absolutely delighted," Irving said.

He confirmed friction between Bagnall and the others, but said he did not want to publicly air the disputes.

Irving said Synergi had three offices in Auckland, one each in Wellington, Christchurch and Palmerston North, and six in Australia.

The company's annual sales were $150 million in New Zealand and more than double that in Australia.

But those figures are the total size of travel packages sold. Synergi receives only a fraction of those sums.

Last year's contentious information memorandum put the operating earnings at $3 million in New Zealand and $1 million in Australia.

Synergi moved into Australia when it bought the corporate travel division of a company called Jetset from Air New Zealand in 2001.

Irving said the Australian assets were probably being sold a little soon, as they were still developing.

"But it's not every day that somebody as strategic as Navigant comes along."

The New Zealand assets had been sold on their previous performance, the Australian assets on their expected performance.

One issue for Synergi will be rebranding. Its name from next month will be TQ3 Navigant.

The TQ3 name has been used in this market by the Flight Centre.

"We'll have a pretty heavy marketing job to do," said Irving.

Navigant says it is North America's second largest "travel management business services provider".

It says it has corporate, Government, military, leisure and meetings and incentives clients.

Settlement of the Synergi deal is due at the end of the month.