Karavel Group is an online travel business that was backed by LBO France and recognized for the recovery of travel companies in difficulty. The company had spent millions of euros to acquire businesses that were no longer profitable. In November 2015, they set their sights on FRAM, a family travel business founded in 1949, whose brand maintained its high quality image despite its mounting financial difficulties since 2000. In the buyout, it appears that various factors motivated Karavel to invest recovery capital in FRAM, while FRAM was motivated by other factors to accept the buyout. Did FRAM make the wrong decision in selling to a company backed by an investment fund? This case study highlights the varied motivations that led the firms to conclude an offer, as well as the process of the offer and its consequences. It highlights key issues of patient and recovery capital and financial versus strategic value in buyouts of struggling family businesses
