The US initial public offering of Travelport, the Atlanta, Georgia-based global distribution system (GDS), will be priced at $16 a share. That’s at the highest end of the range it marketed 13 days ago.
The pricing — which values the company at $1.9 billion — suggests its underwriters are optimistic.
The $16 share price for the Atlanta-based company is the same as the offer price of Southlake-Texas-based rival Sabre Holdings, which IPO’ed in April and recently traded at $18.92, under the symbol SABR.
On Thursday the 25th, Travelport will offer 30 million shares under the symbol TVPT on the New York Stock Exchange. It has also granted the underwriters a 30-day option to buy up to an extra 4.5 million shares.
It aims to raise $480 million — more than four times as much as expected in its original filing.
In 2006, Blackstone took majority ownership of the company from Cendant in a $4.3 billion deal. But after the IPO the private equity firm would own about $137 million, or about 7%, of the company, based on the offer price. (It is not selling shares in the IPO.)
A source told the New York Times that Blackstone believes it earned “a roughly 15% internal rate of return on the investment in Travelport.”
Separately, Blackstone garnered $367 million this year selling most of its stake in Orbitz Worldwide Inc., which Travelport spun out in an IPO in 2007.
In July, Travelport reduced its ownership in Orbitz from 37% to 1%.
Travelport intends to use the proceeds of the IPO toward paying down its debt, which was $3.3 billion as of June 30. In 2010, for comparison’s sake, it had $4.1 billion in debt.
The company has been unprofitable in four of the last five years. (See Tnooz’s coverage of this year’s IPO 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.
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.
But unlike its peers, it has a majority stake in a payment solutions business, eNett, that claims rapid growth, according to The New York Times DealBook. For insight, see Tnooz’s earlier report, “Travelport ups eNett stake, payment system valued at $450 million with eyes on other industries.”
NB: IPO image courtesy Shutterstock.
