With the added investment from going public, Lindblad Expeditions
expects to build at least two new ships over the next three years and double
its revenue over the next five.
“In order to grow, we have to expand inventory,” said
Sven-Olof Lindblad, founder and president of Lindblad Expeditions, adding that
the company has been operating at or near capacity in recent years.
Lindblad last week announced a merger deal with Capitol
Acquisition Corp. II, a public investment vehicle that was formed in 2013 with
the intent of effecting a merger or acquisition. The company raised $200
million in an initial public offering in May 2013. Capitol CEO Mark Ein also
runs Two Harbors Investment Corp., a publicly traded real estate investment
trust.
In the Hot Seat
Michelle Baran spoke with Sven-Olof Lindblad about what Lindblad Expeditions' deal to go public will mean for the growth and expansion of the adventure travel company. Read More
With the announcement of the merger, Lindblad is also
extending its 11-year partnership with National Geographic through the end of
2025. Lindblad has an exclusive partnership with National Geographic for all
ocean-going, ship-based voyages, which includes all Lindblad-owned vessels
carrying the National Geographic name. Lindblad and National Geographic will
align marketing efforts to promote the expedition product, and expeditions will
continue to feature National Geographic photographers, writers, field
researchers and film crews. Additionally, National Geographic will become an
equity partner in the merged company through a 5% option.
The deal is expected to close by May 15, at which time
shares of the newly created Lindblad Expeditions Holdings will begin trading on
the Nasdaq exchange.
At that time, Capitol and its current stockholders will own
50% of the company, Lindblad Expeditions will own 49%, and the Lindblad Expeditions-National
Geographic Joint Fund for Exploration and Conservation will own 1%.
Sven-Olof Lindblad will have 29% ownership in the merged
company. Lindblad’s current management, led by Sven-Olof Lindblad, will remain
in place.
With the added capital, Lindblad plans to order at least two
new expedition ships, one for delivery in 2017 and one for delivery in 2018,
though the company has not yet specified where those ships will sail. And with
what both Lindblad and Capitol see as considerable growth and opportunity in
the expedition cruising market, there could be more vessels to come.
“This is a compelling market opportunity, because we all
know as individuals accumulate wealth and free time they seek unique
experiences, which has led the expedition sector to some of the highest growth
rates in the travel industry,” Ein said during a conference call for potential
investors last week.
Ein said that from 2010 to 2014, Lindblad’s earnings
compounded at a rate greater than 20% and revenue at a rate of more than 14%.
He added that Capitol expects earnings to double over the next five-year
period.
“In addition to the current core business, there are
significant growth opportunities, and we think those growth opportunities will
be accelerated by the capital and the public currency that this merger brings,”
said Ein. “Amongst these opportunities are the opportunities to build new
ships, expand charters and potential acquisitions.”
Sven-Olof Lindblad said that he sees growth opportunity in
the expedition-cruising market. However, he hinted that if the land business
were to be further developed it would be through acquisition.
The two new vessels Lindblad will order will be similar in
size and feel to the expedition ships in the existing Lindblad fleet, which
consists of six National Geographic-branded vessels, ranging from the
47-passenger National Geographic Islander to the 148-passenger National
Geographic Explorer.
Lindblad said he didn’t want to build too many ships, and he
didn’t want to build large cruise ships. Instead, he wants to focus on the
small-ship expedition-cruising model that enables the line to take guests to
more unique and harder-to-get-to destinations.
He noted that the company’s ethos of research-driven,
environmentally conscious travel would continue to guide its actions.
“We are very much, on the one hand, a business that we
believe is a solid business, and on the other we have a very significant social
agenda,” said Lindblad.
Along those lines, the founders of Capitol will make a
charitable donation of 500,000 shares of stock to the Lindblad
Expeditions-National Geographic Joint Fund for Exploration and Conservation,
which since 1997 has raised $10 million with the help of Lindblad guests for
conservation and environmental efforts.