Prosus's Strategic Acquisition of Despegar Amplifies Growth Plans

Prosus Moves to Acquire Despegar for US$1.7 Billion

In a significant strategic move, Prosus, a global technology company, has taken steps to acquire Despegar, a leading online travel agency in Latin America, for US$1.7 billion. This purchase price of $19.50 per share marks a 33% premium over the closing share price. The acquisition enhances Prosus's presence in a rapidly evolving e-commerce landscape in Latin America.

Impact on Prosus's Regional Ecosystem

This acquisition comes as a compelling addition to Prosus’s existing ecosystem, expanding its footprint to serve more than 100 million customers across various sectors including travel, fintech, and local e-commerce.

CEO Insights on the Acquisition

Fabricio Bloisi, CEO of Prosus Group, expressed his enthusiasm regarding the acquisition, emphasizing the strategic alignment it brings. He stated, “This acquisition is a clear demonstration of our strategy to build value by creating a high-quality ecosystem. Despegar's profitability and strong market position make it a natural fit for our existing portfolio in Latin America.”

Despegar’s CEO Welcomes New Era

Damián Scokin, CEO of Despegar, shared his perspective on the transaction, emphasizing the benefits it brings to stakeholders. “This development represents significant value for our stockholders. Additionally, Prosus's ability to provide a more expansive array of services and greater customer benefits will enhance our offerings,” he noted.

Despegar’s Business Model Explained

Despegar operates within 19 Latin American markets and employs an omnichannel B2C platform. This platform connects with users through a website, smartphone application, and conversational channels which are bolstered by its AI assistant, Sofia. Additionally, Despegar has been growing its B2B segment, offering white-label solutions to major industry players such as banks and airlines.

Financial Performance and Growth Metrics

Over the last two decades, Despegar has established itself as a leader in the travel sector, handling around 9.5 million transactions annually. According to its most recent full-year results, Despegar generated gross bookings of $5.3 billion, with revenues reaching $706 million and an EBITDA of $116 million. This strong financial performance underlines the effectiveness and scalability of its business model.

Legacy and Recognition

Founded in Argentina in 1999, Despegar grew significantly before becoming publicly traded on the New York Stock Exchange in 2017. It is now one of the most recognized travel brands in Latin America, especially with its Decolar brand leading in Brazil.

Future Prospects Post-Acquisition

Following the acquisition, Prosus sees vast potential in enhancing user growth on Despegar through its broad consumer ecosystem. The integration with other regional businesses like iFood, and Sympla is expected to create valuable synergies, ultimately enhancing user experience and driving innovation.

Fabricio Bloisi Discusses Market Potential

Bloisi highlighted the promising economic environment in Latin America, indicating real GDP growth nearing 2-3% in upcoming years. He further noted, “The opportunities within the online travel sector in Latin America give us confidence that we can elevate Despegar’s business significantly. This acquisition exemplifies how we can integrate businesses into our ecosystem, fostering growth and innovation.”

Transaction Details and Expectations

The acquisition transaction is subject to customary closing conditions, including shareholder approval and necessary regulatory clearances. It is expected to close in the second quarter of 2025, showcasing Prosus's commitment to solidifying its position in the market.

About Naspers and Prosus

Naspers, founded in 1915, has evolved into a global consumer internet company and stands as one of the largest technology investors worldwide. Through Prosus, it focuses on building internet companies that empower users. Established as a tech leader in South Africa, Naspers continuously invests in innovative e-commerce platforms, further demonstrating its commitment to growth in the digital landscape.

Frequently Asked Questions

What is the deal value for Despegar?

The acquisition deal is valued at US$1.7 billion, translating to $19.50 per share.

How will this acquisition affect Prosus's operations?

This acquisition will enhance Prosus's presence in Latin America, expanding its customer base and service offerings across various sectors.

What does Prosus aim to achieve through Despegar?

Prosus aims to leverage its extensive ecosystem to drive growth for Despegar, enhancing its service offerings and market position.

When is the acquisition expected to close?

The transaction is expected to close in the second quarter of 2025, subject to regulatory approvals and shareholder consent.

Who are the advisors for this transaction?

Morgan Stanley & Co. International PLC serves as the exclusive financial advisor to Prosus, while Goldman Sachs & Co. LLC advises Despegar's transaction committee.

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