NEW YORK -- American Express Co., the nation's largest travel
agency, agreed to buy Travel One, the nation's ninth largest agency
with annual sales of about $700 million. Terms were not disclosed.
Travel One will become a wholly owned unit of American Express,
officials said. Jeffrey Harrow, president and chief executive and
Scott Tarte, chief operating officer, will continue to lead Travel
One from its Mount Laurel, N.J., headquarters.
American Express, through the acquisition, has captured one of
the last so-called super regional agencies in the U.S., most of
whom were acquired in recent years by Englewood, Colo.-based
Navigant International. The deal expands American Express' presence
in the mid-sized corporate market, where Travel One has thrived
over the years. American Express, with 1997 volume of $17.4
billion, has about 75% of the Fortune 500 corporations among its
customers.
"American Express has a large middle market travel business as
well," said Ed Gilligan, president, American Express Corporate
Services. "By combining forced with Travel One we have a great
presence in this part of the business."
The deal ends months of speculation about Travel One's future,
which was widely thought to be in merger talks earlier this year
with Philadelphia-based Rosenbluth International. Harrow said
Travel One entered talks with American Express after taking a hard
look at its future in the industry. "We had been thinking about
what Travel One should do in the future for a long time," Harrow
said. "We looked at a lot of options and we felt that this is the
best path for Travel One people and our clients."
Harrow said when he and Tarte looked around at the various
options, a deal with American Express made a lot of sense. American
Express, with its deep pockets of cash and wide array of technology
tools, could offer Travel One customers the kind of products that
few agencies can afford.
"I think its a wonderful opportunity for the clients of Travel
One to be able to take advantage of the infrastructure in place at
American Express and [at the same time] be able to get the
personalized service from Travel One," said Carol Salcito,
president of Stamford, Conn.-based Management Alternatives.
The deal is another example of American Express' aggressive new
stance to solidify its position in the travel industry. In the past
year, American Express has pulled off major deals to acquire Havas
Voyages, the largest agency in France, and Farmingdale, N.Y.-based
Travel Impressions and its retail arm, Empress Travel, one of the
largest tour operators and agency franchises in the country.
American Express also entered a major deal with Continental
Airlines earlier this year to buy seats on a series of Virgin
Atlantic code-share flights to London.
"We've had a very focused approach on how we grow this business
both on an organic perspective and from an acquisition
perspective," said Margaret Brownlee, chief operating officer of
American Express Corporate Services. "I think what we'll be able to
do is really take a look at Travel One's best practices in this
segment." She added that, "Travel One has a great reputation in
this market."
Travel One said it will continue to operate under its own name
until a final decision is made. Travel One's employees and offices
are expected to remain in place, however there will be some
integration of back-office functions and overhead. The agency has
about 1,400 employees, based in 30 full-service offices and 125
on-site locations. Its largest presence is in New Jersey, Maryland
and Ohio.
Officials expect the deal to close in about two months, subject
to regulatory review.