Corporate Travel Management takes on the world with T&T purchase: Jamie Pherous

Corporate Travel Management is ready to take on the world after its purchase of T&T was consummated in just three days, its CEO says.

Corporate Travel Management CEO Jamie Pherous. Picture: Liam Kidston.

Brisbane’s Corporate Travel Management is now the world’s fifth largest business travel group, following its $US200m ($282m) acquisition of the Omaha-based T&T Group on Monday.

“This is a cracking acquisition we will be dangerous together in North America,” said Corporate Travel Management chief executive Jamie Pherous in an exclusive interview with The Australian.

Mr Pherous said he had long eyed the privately owned T&T, or Travel & Transport, given its strong base of clients in America’s north east, particularly New York, as well as its large numbers of professional clients including lawyers, investment bankers and private equity groups.

He said this type of corporate travel business will be crucial in the post COVID-19 realm, adding that the deal positions CTM years ahead of its growth trajectory. “We expect massive consolidation of the world’s businesses post COVID-19,” he said.

“We were underweight in these types of professional clients.”

Mr Pherous said the deal to buy the privately owned T&T was consummated in just three days and there would be some consolidation of their offices, given in some North American cities the two companies share six to seven offices between them.

He was attracted to T&T because of the scale of its business as well as the geographic location of its clients and its popular corporate hotel program, known as Radius.

“We expect this to be executed very quickly, and following the acquisition we will be the biggest corporate travel manager in the world in the mid market,” he said.

“Based on 2019 numbers we will together have a combined total transaction volume of more than $10.8bn and will be employing around 1100 staff.”

Mr Pherous said the $US200m acquisition of T&T — which includes the purchase of its popular Radius Travel and Hotel program that gives clients late check-outs and room guarantees — was negotiated on a cash free and debt free basis.

“But we raised an extra $72m if there is a prolonged loss due to COVID-19 and to weather that storm.”

Mr Pherous said since Corporate Travel Management entered the US in 2013 he had viewed T&T as a formidable competitor as it was the biggest mid-market player in North America.

“We have been courting them for seven years … they didn’t have to sell at all, but we went to Omaha, we mapped out a plan. It was so compelling.”

He said the Radius Travel and Hotel Program was very powerful because it offered clients guaranteed rooms and upgrades in four and five star hotels.

The deal comes as Mr Pherous called for an easing of state border travel restrictions.

“I think it is crazy we are talking about opening up a travel bubble between New Zealand and NSW when we can’t even open up Sydney and Brisbane.

“The reality is there is an infection rate of one in every 2 million in Australia, and both the NSW and Queensland governments have demonstrated very good tracing and tracking capabilities.”

Mr Pherous said it broke his heart to see the damage to the economy with the state borders still closed. He said if the state governments opened up their borders there would be a soft economic landing and with the unwinding of JobKeeper it was imperative that governments open up borders.

“As JobKeeper rolls off they have to have an open economy to protect a soft landing, it is a recipe for disaster rolling down JobKeeper with economic restrictions. The smartest thing to do is open the borders because the infection rate is very low and the government have all the tools to manage the tracking and tracing. Otherwise it’s a receipt for disaster for mass unemployment.

“Every day that it goes there will be more debt for future generations.”

Asked about the short selling debacle with VGI last year, Mr Pherous said: “we have very clearly proven their accusations were wrong. By their own acknowledgment they have had a poor financial performance.”

VGI’s stock price has plunged from $18 a year ago to $6.35 at Monday’s close.