Skift Take
As with many mergers, the jury is out on how Student Universe will fare within the Flight Centre umbrella. Will Student Universe, which was looking for a spark, now truly be able to grow with expanded resources or will broader corporate priorities overtake it?
Flight Centre’s $28 million acquisition of Student Universe has officially closed and caps a more-than-year-long process in which the student travel site was mulling strategic alternatives.
“We’ve never had the bandwidth to expand geographically as we want to,” says Student Universe CEO Atle Skalleberg, adding that the company will now be able to leverage Flight Centre’s commercial contracts and supply network to spur expansion into new markets.
Skalleberg, who will report to Dean Smith, president of Flight Centre Travel Group Americas, says Student Universe will now strive to become the clear global winner in student and youth travel, a distinction that no company can yet lay claim to.
Like other travel companies, Student Universe, founded in 2000, had to cope with the disruptions of the September 11, 2001 terrorism attacks and the 2008 financial crisis. Along the way, parent company Travelonomy Ltd., based in Ireland, had raised about $20 million in funding, including the $5.8 million it raised in 2009. There were no institutional investors.
Student Universe decided to conduct a review of strategic alternatives more than a year ago. “We were in no rush,” Skalleberg says. “We dipped our toe in the water.”
After discussions with “numerous parties,” Student Universe entered into exclusive talks with Flight Centre, the Australia-based public company, and this turned out to be “the best strategic fit,” Skalleberg says.
Skalleberg says it is too early to tell precisely how Waltham, Massachusetts-based Student Universe will fit into Flight Centre’s overall student/youth travel strategy, although the Student Universe brand and its management team will remain in place. Flight Centre has several consumer and B2B student travel brands.
Asked whether there would be a Student Universe staff downsizing in tandem with the Flight Centre merger, Skalleberg says he “imagines the team will grow substantially” as it expands its product mix and geographies.
The student travel agency, which offers negotiated deals for students, did $250 million in gross bookings in 2015, according to Flight Centre.
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Tags: ceo interviews, flight centre, studentuniverse
Photo credit: Monash University students studying abroad check out the scene at Camps Bay in South Africa. Monash University / Flickr.com