The long-awaited US initial public offering of Travelport, the Atlanta, Georgia-based global distribution system (GDS) bought by private equity firm Blackstone Group, values the company at as much as $1.9 billion.
The company will offer 30 million shares under the symbol TVPT for $14 to $16 a share. It aims to raise up to $480 million — more than four times as much as expected in the original filing.
Morgan Stanley, which has a 7.6% stake, and UBS are the main managers of the IPO.
The principal owners of the company are funds aligned with Angelo, Gordon and Co. (approximately 22%); investment funds associated with Q Investments (approximately 14%); and Blackstone (approximately 13%), according to the filing.
In 2006, Blackstone took majority ownership of the company from Cendant. But, according to Reuters, it would own only 7.2% of Travelport after the IPO.
Travelport has been unprofitable since 2010, when it last attempted an IPO. (See Tnooz’s coverage of the IPO filing.)
In 2010 the company pulled its last IPO attempt in London because of European economic turmoil. It later narrowly avoided a bankruptcy filing.
Forward tilt
The company’s roadshow will likely argue that the modest success of the IPO of rival GDS Sabre this spring anticipates a good showing for Travelport. (Sabre is currently 15% higher than its $16 offer price.)
In May, Travelport’s CEO Gordon Wilson told Tnooz that the company wanted to sell its shares in online travel agency Orbitz. Today Renaissance Capital says that, in July, Travelport reduced its ownership in Orbitz from 37% to 1%–a report we have not been able to confirm.
The technology giant remains loaded with debt, similar to its peers. Net proceeds from the IPO will be used to pay that debt down, though it will may still have as much as $2.4 billion in liabilities afterward. In 2010, for comparison’s sake, it had $4.1 billion in debt.
The IPO roadshow will likely also tout to investors the company’s growing revenue, which grew 3.5% to $1.1 billion in the first half of this year, compared with the same period a year earlier. That said, its revenue is down approximately 10% from its attempted London IPO.
Travelport has the smallest share of the GDS market, or roughly 25%, compared with its main rivals Sabre (36%) and Amadeus (39%), according to analyst estimates and company statements. Competition from other GDSes, such as China-based TravelSky, with which Travelport has partnerships, may also affect its future market share.
More on the Travelport IPO: Nuggets from the Travelport IPO filing
