Epsilon Net acquisitions in the Hospitality Sector
Major acquisitons in the hospitality sector, in order to create an „all in one solution“ for integrated systems of technological solutions in software of the Tourismus industry.
Epsilon acquires a majority stake in 3 business software companies:
- 70% of English „Hotel Availabilities Ltd“ for € 98.000, active in the development of Channel Manager systems
- 55% of Greek „BookOnlineNow IKE“ for € 220.000, active in dev. of online booking engine systems
- 55% of Cypriot „HotelonCloud Ltd.“ for € 180.000 a strategic distributor ob BookOnline Now abroad.
These transactions are part of the groups development policy in dynamic vertical markets and the creation of an integrated portfolio of product solutions & services.
What I really like about Epsilon Net‘s acquisitions:
- all are already (highly) profitable with profit margins between 22% and 64%
- all have zero debt
- Epsilon was able to acquire them for low single digit earnings multiples: 3.5x / 5x / 4x
Here is a short summary of Epsilon Net $EPSIL.AT
How do they manage to find such attractive deals (combo of high quality and decent multiples)?
@tomato I think they already worked with these solutions or their customers of Epsilons Hospitality solution & it worked well. As Epsilon planned to build a one-stop-shop solution for hospitality this was a great fit. But overall, the greek business software market is very fragmented. Epsilon has managed to become the largest player in the greek software market. This offers a big opportunity for small solutions like the one above. They will continue to to profit from the future development of the company as epsilon only acquired a majority stake and not all. I think with the opportunity to participate from epsilons large customers base, the sellers are more likely to give a discount on the valuation