Private equity firm EagleTree Capital made an investment in Frosch International Travel which CEO Bryan Leibman said will bolster the company's balance sheet and support investments in areas ranging from technology development to potential acquisitions.
The Leibman family will continue to control New York-based Frosch, No. 14 on Travel Weekly's 2020 Power List. This is the first time Frosch has worked with a private equity firm.
CEO Leibman said the investment will keep Frosch's financial position strong, especially in light of the coronavirus crisis and its devastating impact on the travel industry.
"We don't know, really, how this all comes back, what it looks like, even as we're all bullish on it," Leibman said. "I think it was a very prudent thing to do, an opportunity to align with a strong financial partner."
EagleTree is familiar with the travel industry, Leibman said. The private equity firm owns Northstar Travel Group, parent company of Travel Weekly.
"Bryan's view of the future of travel aligns well with ours, and as a leading company in the sector, Frosch is an ideal partner for us," Michael Struble, senior partner at EagleTree. "We look forward to supporting Frosch's strategic growth plan, both organically and through [mergers and acquisitions]."
Frosch, which had 2019 sales of $2.4 billion, has a strong presence in both the leisure and corporate markets. According to executive vice president Lara Leibman, corporate travel solutions account for 66% of its business mix; meetings and events, 6%; luxury and leisure, 26%; and travel and expense consulting, 2%.
Bryan Leibman said EagleTree's investment will enable the travel management company to continue its investments in infrastructure, technology, workforce and acquisitions of companies in the technology and agency space.
Technology development has always been key to Frosch's strategy, the CEO said, specifically pointing to its agent platform. The company is also focusing on how to operate more efficiently, important for the business' long-term health and success, he said.
The investment will also aid Frosch's efforts to develop its technology on the corporate side. Travel and expense is going through a "massive change" right now, Bryan Leibman said, and the capital will help Frosch continue to invest in its user experience.
In the short term, Frosch is looking at merger and acquisition opportunities, said Marc Kazlauskas, president of Frosch's leisure division and U.S. branch operations. Frosch is also looking for successful independent contractors to join its nearly 1,000 ICs.
While Frosch experienced the same sharp downturn in travel that most did during the pandemic, its leisure villa collection rentals did quite well, and the future is looking bright, Kazlauskas said. And at the turn of the year, call volume went up "substantially."
"That pent-up demand is almost euphoric," he said. "People are champing at the bit."
Correction: This report was updated to correct the attribution of a quote from Michael Struble, senior partner at EagleTree.