There’s no better motivator than survival at sea. When Jeff Ellison, Chief Executive and Managing Director of SeaLink Travel Group took the helm of SeaLink in 1997, he knew that something would have to change. As a passenger and freight service to Kangaroo Island, the one-ferry business was not large enough and far too seasonal to stay afloat. Today, SeaLink employs over 1100 dedicated staff to help more than 8 million passengers with their journeys every year. So how did it move from a one-ferry operation in the red, to a prosperous tourism success story?
“In the early days, we knew we had to give people a reason to visit Kangaroo Island,” says Ellison. “We identified in our strategic planning that tourism was an opportunity for the Island. The Island could deliver on wildlife, scenery and natural features, such as Remarkable Rocks, Kelly Hill Caves and Seal Bay.”
Rather than restrict the company to fitting into the current market, SeaLink embarked on a series of acquisitions that would create its own market; a vertical integration solution that would give it control from destination promotion to product delivery. Among SeaLink’s first acquisitions were travel agencies in Sydney, Adelaide and Melbourne to secure access to tourists.
The acquisition of Adelaide Sightseeing, which ran tours and airport transfers, solved the problem of transfers to and from the ferry terminal at Cape Jervis (1.5 hours from Adelaide). Every step of the way, SeaLink was adding the type of value to its business that would increase confidence in the way it could attract and look after its customers.
“You have to make the whole experience of travel enjoyable and fun. I regularly ask our staff to think about how we can make things easier to find, enquire, book and travel. If you’re on holidays or a regular traveller you want to be confident that your plans will go smoothly,” says Ellison.
SeaLink grew the business until it all but saturated the market in South Australia; acquisitions interstate and in New Zealand followed. The purchase of Captain Cook Cruises in Sydney Harbour and Western Australia provided access to a well-known brand and further increased its tourism reach.
The company floated on the Australian Securities Exchange in 2013, which helped raise the capital required for the $125mpurchase of Transit Systems Marine in Queensland—SeaLink’s largest acquisition to date in November 2015.
“It’s a bit of a balancing act,” remarks Ellison. “How quickly can you grow? What do you want to attract? How will they add value? Are they a good cultural fi t? We have a well-honed list of criteria we go through when considering any new business. Most importantly, we are agile enough to respond quickly and diligently to opportunities and patient enough to negotiate with respect and confidence.”
Perhaps the essence of their business story is that SeaLink is adept at managing flexible strategy. It has identified the non-negotiables that keep its business on track. It has a clear measuring stick against which all new opportunities can be assessed and never loses sight of what its customers want. After all the boxes are ticked, SeaLink is in the business of fun memories and happy snaps; and knows just how much hard work is required to make it look effortless.
TIPS TO ASSESS AND MANAGE ACQUISITION OPPORTUNITIES:
Is the price right? In what condition are their assets? Do they need much investment to bring them up to our standard?
CAN WE OPERATE?
How will this work for us in the future? Does the new acquisition have the licences to operate where and how we want to do business?
CAN WE ADD VALUE?
We need to grow this opportunity into something bigger. Do we have the skills and expertise to add value? Can we create something better than the sum of the parts?
IS IT A CULTURAL FIT?
Does this opportunity match how we think, see and feel about our company? What are the values of their leaders?
AN EYE ON THE TRENDS
Does this opportunity fit with the trends we see happening in our industry? Does it offer us an advantage? You have to know your customers well to predict upcoming trends.
Run the opportunity through a few different financial models. Do they come up with the same answer? Where are the gaps? What do they mean?
You need an expert leadership team with a unified understanding of the strategic direction of the company, and this team needs to have the power to act quickly.
You need to understand what is worth waiting for. If it fits your criteria, but the timing isn’t right, can you wait? What can you do while you wait to increase your chances?