In 2019, we announced our intention to focus on growing earnings through our existing investments and the targeted deployment of capital to investments in loyalty solutions and other sub-sectors of the rapidly-expanding loyalty and travel markets that would be expected to generate returns well in excess of our low cost of capital.
Loyalty and travel are vast and growing markets. Over the last three decades, loyalty memberships have experienced annual double digit growth. North American consumers now have almost 4 billion loyalty memberships – with retail, travel and hospitality and financial services sectors representing 88% of loyalty memberships in the US and 80% in Canada(1).
International travel departures have grown from 0.7 billion to 1.6 billion(2) over the last two decades as travel has come within reach of more consumers, making it a rich but fragmented industry accounting for over 10% of global GDP when including direct and indirect consequences.
Aimia’s deep industry knowledge from years of experience as an operator, its extensive brand recognition, and its wide-ranging network will continue to provide meaningful opportunities to source proprietary transactions and will enable Aimia to create unique angles for value creation as it participates in M&A activity in these two core industries.
Aimia remains committed to considering all opportunities to add value to shareholders that may present themselves in the future, including potential further returns to shareholders depending on all facts and circumstances prevailing at such time.
Investments will follow a disciplined process with four principal steps in targeting additional sub-sectors:
- identifying growing sub-sectors within loyalty and travel that are fragmented and ripe for consolidation;
- identifying and acquiring assets within identified sub-sectors that can be utilized as a platform for further investment and growth;
- selecting and adding bolt-on acquisitions within the sub-sector that will be immediately accretive to Adjusted EBITDA; and
- extracting synergies from bolt-on acquisitions to enhance earnings
(1) Loyalty membership data sourced from LoyaltyOne, 2017 COLLOQUY Loyalty Census.
(2) World Tourism Organization data, Yearbook of Tourism Statistics, Compendium of Tourism Statistics and data files, 1997-2017.