Prosus, a global technology company, has announced that it has entered into a definitive agreement to acquire Despegar, a leading Latin American Online Travel Agency (OTA), for USD 1.7 billion.

In a press statement, Prosus says that its offer to pay Despegar USD 19.50 per share, equating to a 33 pc premium to the closing share price as of December 20, and a 34 pc premium to Despegar’s 90-day VWAP (volume weighted average price) was approved by Despegar’s board of directors, who recommended that Despegar shareholders vote in favour of the proposed transaction following the unanimous recommendation by a transaction committee.

The South African giant says that the transaction introduces a significant and compelling addition to Prosus’s Latin America ecosystem, which, post-transaction, will expand to serve over 100 million customers across local e-commerce, travel, and fintech sectors.

Despegar operates in over 19 Latin American markets, serving customers through two primary business models, an omnichannel B2C platform that connects with users via the web, mobile app and conversational channels powered by the company’s AI assistant, Sofia. Its second model is a rapidly expanding B2B segment that offers white-label solutions to partners such as banks, airlines, and retailers.

According to the statement, over the past two decades, Despegar has developed and grown into a sector leader with a proven and scalable business model. The company handles over 9.5 million transactions annually, generating USD 5.3 billion in gross bookings, USD 706 million in revenue, and delivering a reported EBITDA of USD 116 million based on its full-year 2023 results.

Founded in Argentina in 1999, the business scaled and expanded throughout the region before listing on the New York Stock Exchange in 2017. Despegar has become the most recognised travel brand in Latin America and its Decolar brand is the most recognised brand in its largest market, Brazil.

“This acquisition is a clear demonstration of our strategy to build value by creating a high-quality ecosystem of complementary businesses. Despegar is a highly profitable company, with an attractive market position, and an experienced management team, making it a natural addition to our presence in Latin America. We will accelerate Despegar’s growth by leveraging the extensive customer touchpoints within our portfolio, along with our operational expertise and advanced AI capabilities,” says Fabricio Bloisi, CEO, Prosus Group.

“This is an exciting development that delivers a great outcome for Despegar stakeholders. The transaction represents significant value for our stockholders, and I am convinced that Prosus is the ideal partner to drive our next phase of growth. For our customers, this means access to an expanded portfolio of services, better experiences, greater loyalty benefits and more complete solutions tailored to their needs. Prosus has a proven track record of building leading tech businesses across the world, and their deep understanding of the Latin American ecosystem uniquely positions them to drive our next phase of growth,” says Damián Scokin, CEO, Despegar.

Prosus says it sees significant potential in leveraging its extensive consumer ecosystem in the region to drive user growth and engagement on Despegar, while introducing new products and services to enhance the platform’s value proposition over time.

Through this acquisition, Prosus plans to create synergies between Despegar and its other regional businesses, such as iFood, Latin America’s leading food delivery platform with 60 million customers per year, and Sympla, a prominent events platform.

“Latin America is a market we know and understand well, with real GDP growth of 2-3 pc expected next year and promising medium to long-term prospects. Coupled with that, online travel is expanding significantly around the world and the opportunities in the Latin America region give us confidence that we can work with Despegar to take the business to the next level. This investment will serve as a powerful example of how we can build value by integrating businesses into our ecosystem, driving growth, innovation, and lasting impact,” adds Bloisi of Prosus.

According to the statement, the transaction has been entered into on terms and conditions customary for transaction of this nature, and is subject to the customary closing conditions, including approval by Despegar shareholders and the receipt of necessary regulatory approvals and is expected to close in Q2 2025. The purchase consideration will be funded from existing cash resources.