TBO Tek Shares Surge To Hit 6-Month High On Classic Vacations Acquisition

Shares of TBO Tek surged nearly 14% in early trade on Wednesday, after the company announced an agreement to acquire US-based Classic Vacations for $125 million.

In a press release dated September 3, TBO Tek, a global travel distribution platform, announced the acquisition of Classic Vacations, a luxury holiday platform owned by investment firm The Najafi Companies.

Acquisition Rationale

The acquisition marks TBO's entry into the premium outbound travel segment, which aligns with Classic Vacations' strong B2B brand and network of high-value advisors. TBO and Classic Vacations will combine their portfolio to grow in the luxury travel market, which is expected to grow in the coming years.

“We're excited for this next phase in our company's journey – TBO's tech-centric solutions are geared fully toward our travel advisor community. TBO connects us to its first-class technology platform, unlike what the wholesale market has ever had access to – allowing us to bring even more resources, tools, and insider connections to our valued travel advisors,” said Melissa Krueger, CEO of Classic Vacations.

Ankush Nijhawan, co-founder and joint managing director of TBO, stated that the acquisition supports the company's strategy of pursuing both organic and inorganic growth, and the company remains open to future strategic alliances.

Analyst Take 

SEBI-registered analyst Vatsal Khemka noted that this deal is positive for profitability & global reach in the long-term. However, in the short-term, profitability may get impacted due to acquisition costs. 

On the technical charts, he believes that the momentum needs to cool off and a consolidation or short-term dip is likely. He advised against fresh longs currently and advised existing traders to hold positions and trail stop-loss.

Stock Watch

There was a strong buzz around the acquisition on Stocktwits, with retail sentiment shifting from 'neutral' to 'extremely bullish'. This was accompanied by a surge in messages on the platform, with volumes shifting from 'extremely low' to 'extremely low'. It was also among the top 10 trending stocks on the platform.

Despite today's gains, the stock has shed nearly 11% so far this year.

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