Club Travel Corporate (CTC) has a new equity partner, the Alitheia IDF Fund (AIF), whose buy-in will primarily enable CTC’s black-women-led management team to take over the company through a buy-out arrangement.
The value of the deal was not disclosed, however Gary Mulder, Club Travel CEO, said the figure was substantial. He confirmed that Club Travel SA would retain a stake in the business, and that CTC’s brand and existing management team would not change.
“Customers will benefit from even stronger BEE credentials, continually improving technology products from us and a company with a strong balance sheet that will support the growing business and take Club Travel Corporate to new heights,” said Mulder.
The Club Travel Group SA, which is owned by Travelstart, said the investment deal sent a strong signal about the potential of women-led SMMEs, especially in the travel sector, which has traditionally been dominated by male-owned businesses.
AIF is managed by two founding firms, Alitheia Capital in Lagos and IDF Capital in Johannesburg and, according to Club Travel Group SA, AIF mostly invests in and grows SMEs led by gender-diverse teams. It has a presence in a number of African countries and sees a need for a greater focus on gender diversity within the investment community.
Polo Leteka, partner at AIF, said she believed there was increasing recognition of the need to level the playing field and ensure that women-led businesses received the same investment opportunities as their male counterparts. “It is with this in mind that we have decided to invest in CTC, a company that is predominantly made up of black women, with 80% of the company's employees being female.”
Leteka added: “We have great confidence in the management team, which has impressive experience in the travel industry as well as a developed network of excellent contacts.”
Founded in 2007, CTC has a national footprint and provides travel services for a variety of SMMEs, corporates, government and the film industry.
CTC’s management team has welcomed the new ownership.
Kananelo Makhetha, CEO of CTC, said: “We are confident that CTC is well placed to take advantage of the renewed business travel market we are seeing now after the ravages caused by the pandemic. Earlier predictions that corporate travel would grow during 2022 are being realised, and we are already seeing more in-person conferences taking place around the world.
“This management buy-out and the support we will have from our new partner, AIF, augurs well for the entire business travel market, which will benefit from the specialisation that we can offer in terms of business travel, especially for our corporate clients.”
The new CTC will look to expand its business in Africa and invest in its proprietary technology, NextCT. CTC said improvements to NextCT would help to provide cost-effective solutions and value-added services to its corporate clients.
Leteka added: “Beyond the huge potential for NextCT to become a leading travel system for travel bookings, the software provides back-end support for expense management, procurement and planning for client businesses. This additional capacity supports better management, making the technology much more than a travel tool. We look forward to working with CTC to expand the company’s offering and footprint to businesses within and beyond South Africa.”
Mulder said negotiations over the deal began about 18 months ago during the heart of the pandemic when travel had largely ground to a halt.
“This reflects confidence in the potential that the business offers. We are proud to have been part of the successes of our corporate travel division, CTC, over the past years, and look forward to seeing the business continue to flourish with our new shareholder partners, management and AIF.
“The management team is a key part of the success to date and will be key drivers of value into the future, and we are excited that the deal allows them to have a key stake in the value they create,” said Mulder.
