In only eight months, USTravel Systems of Rockville has grown to be one of the 15 largest travel companies in the United States.
USTravel got a head start in January when it acquired $100 million-plus Doug Fox Travel, the largest travel agency in the Pacific Northwest. This month, the company added Travel Makers Inc., a $42 million agency in Bellvue, Wash., to its Northwest network.
Now, the privately owned company is looking to buy more agencies in a market where there may not be as many eager sellers as there were two or three years ago.
"In the past few years, travel agencies have been hit by the deregulation process, and consolidated into larger agencies. The agencies left are good, well-run companies that will extract the maximum price. On the other side, there are fewer buyers in the market to compete against," said Stevan Trooboff, a corporate analyst and president of Trooboff & Co. Inc.
Peter Sontag formed USTravel in January after leaving Sontag, Annis & Associates, a travel company he helped establish in 1983. The company's purpose is "to build a national network of solid, established, money-making travel agencies," said Larry R. Burdette, vice president of marketing development for USTravel. "We want to acquire medium to large companies that are dominant in their local market, have each retained its own identity, but at the same time form part of a link of a national network."
"We bought Doug Fox first, not because of the area, but because it was the perfect kind of agency to serve as a flagship for our company," said Burdette.
The flagship has turned into a concentration on the Northwest with the recent purchase of Travel Makers, which will merge with Doug Fox. Travel Makers handles commercial accounts with one location that houses everything from reservation agents to company officers. Doug Fox is a branch operation with 26 travel agencies in Washington state, Oregon and Alaska. Doug Fox's business is split evenly between commercial and retail customers.
"The beauty of the merger is that the two companies are so complementary," said Michael Hadlow, executive vice president of USTravel, and president and chief executive officer of Doug Fox. "You can think about it like a hub and spoke operation," with Travel Makers being the core operation and Doug Fox's branch offices reaching a wider customer base, Hadlow said.
USTravel has not made a decision about changing the name of Travel Makers, but is keeping all the employes of the company. Linda Owen, president of Travel Makers, is now executive vice president and chief operating officer of the new company created from the merger.
Owen said she had had no plans to sell her company. "Last year, Travel Makers earned more money than ever before. He offered a good price," she said.
"I decided the opportunities are greater, especially for having more technology, if we joined USTravel," she said.
As Sontag buys more entrepreneurial travel businesses, he and the previous owners will have to adjust their management styles.
Owen said she is "ambivalent" about working for someone after being her own boss. "I am a very hands-on manager, very involved in every aspect of this travel agency. Now, I need more contributors, I have to be less of a teacher," she said.
Thus far, USTravel Systems has made its mark in the Northwest, but has not yet made a move in other parts of the country.
Sontag will have to have lots of money and good managers to succeed. "He has done it before. He knows what the travel business is about. There are opportunities for success," said Trooboff.
Sovran Financial Corp. has reached a definitive agreement with Dresser Industries Inc. to purchase Dresser Leasing Corp. for $38 million.
Dresser Leasing Corp. is a middle-market equipment and vehicle leasing company based in Pittsburgh. The company has sales offices in Dallas; Houston; San Francisco; Los Angeles; Atlanta; Cincinnati; Columbia, Md., and Moulton, N.J.
The purchase is "consistent with prior steps taken to increase our market share in the Southeast," said C.A. Cutchins II, chairman of Sovran Financial Corp.
Sovran expects Dresser Leasing to be merged into Sovran Leasing by the end of the year. The combined company will have approximately $420 million leases outstanding.
Peoples National Bancorp. (PNB) of Shelbyville, Tenn., has agreed to affiliate with Dominion Bankshares Corp. of Roanoke. Peoples is Dominion's ninth Tennessee bank affiliation. Together these banks will form Dominion Bank of Middle Tennessee.
Under the terms of the agreement, Dominion will issue about 7 1/2 shares of common stock for each share of PNB common stock. Based on a price of $21.375 per share for Dominion Bankshares common stock, the total transaction is worth about $15 million.
Peoples National Bancorp is the holding company for Peoples National Bank of Shelbyville, which operates four offices in Bedford County, Tenn. PNB will continue to operate with its present directors and management under the general policies of Dominion.
USLICO Corp. in Arlington has agreed to buy American Security Travel Service from American Security Corp. in the District for $900,000.
American Security Travel, a full-service travel agency, has been a department of American Security Corp. for 41 years. Following its acquisition, the agency will be renamed United Security Travel Service and relocated to USLICO's offices in Arlington.
The travel agency "will not just be an in-house agency. We will continue to build it as a separate business," said Leslie P. Schultz, chairman and chief executive officer of USLICO.
USLICO is a diversified insurance and financial services holding company.
The Saranow Co. and a group of Chicago investors has recently acquired Miller Paint Equipment Inc. in Addison, Ill., for an undisclosed amount.
Miller makes paint mixers, colorant dispensers and computer-controlled fluid dispensing machines. It is the first company Saranow, a small merchant banking and leveraged buyout firm in the District, has bought as principal.
"We are looking for mundane companies, like manufacturing and distribution firms. Our search is not limited to the Washington area," said Mitchell H. Saranow, president of the Saranow Co.
Prior to the acquisition, Miller was wholly owned by descendents of the company's founder. Now, Saranow will serve as Miller's chief executive officer, but the company's day-to-day operations will be left to Richard Miller, grandson of the company's founder.
Equatorial Communications Co. of Mountain View, Calif., will soon become a subsidiary of Contel ASC in Rockville.
According to the agreement, Contel will buy each outstanding share of Equatorial for $3.75, making the deal worth about $56 million.
Contel ASC, a subsidiary of Contel Corp., transmits voice, data, printed information and video for large businesses and government agencies in the United States and abroad.
Equatorial offers private satellite communications to organizations that need to link remote locations by means other than telephone wires.
Final sale is subject to approval by Equatorial shareholders and various federal agencies. The closing is expected to be completed before Dec. 31.
Planning Resource Corp., a wholly owned subsidiary of Emhart Corp., has been awarded three contracts worth a total of $4 million. The company will design and install computer-aided dispatching systems for the Niagara Regional Board of Commissioners of Police in Canada; the city of Halifax, Nova Scotia, and the Philadelphia fire department.
The systems automate public safety facilities, so safety groups can respond to emergencies quicker.
Unisys Corp.'s Defense Systems unit has been awarded a five-year, $80 million contract from the Environmental Protection Agency.
Under the contract, Unisys will support the EPA's National Computer Center in Research Triangle Park, N.C., and the EPA's National Computer Center in Washington.