It was a long time coming, but travel e-commerce platform provider Travelport Worldwide finally had its initial public offering today, at a starting valuation of $1.9 billion.
Investors seemed to like what they saw in its $16 offer price and in the company’s promise to pay dividends.
As of 3pm Eastern, shares in the Atlanta-based company remained 5% higher than its opening bell price, but shares appeared to be being dragged down by a broader selloff in the overall US market.
The Travelport IPO sold all of the shares on offer, raising about $480 million on 30 million shares.
Travelport’s president and CEO Gordon Wilson spoke with Tnooz’s Kevin May by phone. Wilson said he was “excited, humbled, and satisfied”:
“It’s been a long journey for us, but we are very happy to be here today.”
When asked what were three things that he thinks have made Travelport an attractive investment, he says:
“Investors have liked that we are investing in a travel commerce platform that benefits people involved in different parts of the industry.”
“They also like how 68% of our revenues come from outside of the US and from areas such as the Rooms and More platform and the eNett business, where we are really only barely touching the surface.”
Tnooz asked him what will going public do for the company that it was unable to do before. He said:
“We we doing many of these things anyway, but it will now accelerate want we want to do in many areas of the company and energise us going forward.”
Post-IPO, the expected breakdown in ownership stakes is approximately this: public investors (25%), Travelport’s directors and executives (a combined stake of 28.14%), Blackstone (6.9%), Morgan Stanley funds (5.47%), Angelo Gordon & Co funds (12.23%), investment funds associated with Q Investments (about 8%); plus assorted funds and large investors for the rest. That’s according to the Travelport IPO filing and public statements by institutional investors.
Here’s a round-up of what caught the Tnooz team’s attention in the past 24 hours of financial media coverage:
The company plans to use the money raised in today’s IPO to pay down debt. CEO Wilson told CNBC that the company has no debt due until 2021 and that it will be only four times levered.
CEO Wilson spoke with The Street in a video. He credited the popularity of his company’s shares as a play on the mammoth growth of business travel outside of North America.
New York Times’ Dealbook reported:
William Preston, a research analyst at Renaissance Capital, which manages an exchange-traded fund that tracks IPOs, said prospective investors in Travelport were particularly attracted to eNett’s rapid growth.
Payments provider eNett is majority owned by Travelport. For context, see this August story about Travelport doubling down on eNett.
About an hour into trading, shares ‘popped’ 11%, as noted by a report from the Financial Times. That implied a valuation of about $2.13 billion.
.@fastFT: Travelport shares pop 11% in debut http://t.co/svxDXy40FG
— Financial Times (@FinancialTimes) September 25, 2014
Travelport CEO Gordon Wilson talked about the company’s future and its plan for paying down remaining debt in this CNBC video:
Reuters said that investors believe that Travelport “stands to benefit from the recovery in business and leisure travel as the global economy improves.”
New York Times’ Dealbook reported:
While the deal is not one of Blackstone’s most successful, it has still delivered a profit for the private equity giant. A person briefed on the matter said Blackstone has earned a roughly 15% internal rate of return on the investment.
Blackstone’s accounting must presumably include profits from its own shares of Orbitz, which were once held by Travelport.
There will continue to be much tweeting about $TVPT, such as this one from a MarketWatch reporter (@MarketWatch) September 25, 2014
#IPO $TVPT | Travelport Worldwide LTD 30M shares at $16 Stat Sheet: http://t.co/IkEDJP4HSz (travel commerce platform)
— Tom Wrigley (@WrigleyTom) September 25, 2014
All along the road to the Travelport IPO, it has been amusing to see financial reports try to grasp what the company does in a succinct way.
Today, an early report from Reuters described Travelport as an airline ticketing company, later correcting it to a booking and transaction platform provider for the travel industry.
Travelport’s $16 price was at the top end of the expected range of $14-$16, and the same as its rival Sabre Holdings debuted at in April in that company’s IPO.
NB: Reporting by Kevin May, Linda Fox, and Sean O’Neill.
