Lama and CarFare in $100m merger

Dubai: Lama Group, a destination management company, and CarFare, a Dubai-based mobility solutions company offering car rental services, announced their merger at a press conference in Dubai on Monday. . The $100 million merger will create a combined company, BK Group Holdings, with combined sales of between Dh300 million and Dh350 million and earnings before interest, tax, depreciation and amortisation of between Dh450 million and Dh500 million in 2015, according to Kulwant Singh, managing director of Lama. Both companies said they will, however, retain their brand names. The combined company will have 650 employees, with a head office in Dubai Investment Park. . Established in 1997, Lama offers desert safaris, cruise trips and hotel booking services, among others. Lama’s hotel business accounts for 60 per cent of its revenue. The new company will have nine international offices and 14 in the UAE. . Lama and CarFare combined will offer 3,500 cars to their customers.. "We will be sending Lama staff to all of CarFare’s offices in Sharjah, Abu Dhabi, Business Bay, Media City and Bur Dubai," Singh said. . He further pointed out that demand for rental and chauffeur-driven cars in the UAE is expected to increase with the rise in visitor numbers in the country. Dubai, for instance, is expected to attract 20 million visitors per year by 2020. Also, around 25 million visitors are expected to arrive in the emirate during World Expo 2020, a six-month global exhibition. . Lama’s chauffeur business, which currently account for between 3 and 4 per cent of its revenue, is expected to grow to between 7 and 8 per cent following the merger.. Both companies combined will have 450 chauffeur-driven cars this year.. Lama’s revenue touched Dh140 million last year. The merged-company’s revenue is expected to grow by between 25 and 30 per cent this year, according to Singh. However, revenue growth is likely to slow down to between 15 and 20 per cent next year due to the costs of acquiring CarFare’s offices and cross selling, says Singh. . The company plans to invest $15 million over the next six months on expanding its limousine fleet and the number of offices regionally. It plans to open five more offices in India and one each in Bahrain, Oman and Qatar. . Also, the company is looking at franchising deals in the Gulf.