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Amadeus expands in Corporate Travel IT with proposal to acquire i:FAO Group

April 7, 2014 Corporate No Comments Email Email

Addition of a leading provider of travel management solutions for corporations will allow Amadeus to tap into a fast-growing market 
Events_  Amadeus has signed agreements to acquire 68.5% of i:FAO from, inter alia, Mr Louis Arnitz, Chief Executive Officer of i:FAO Group and other major shareholders, through a tender offer addressed to 100% of the company’s shareholders, conditional upon acceptance by a minimum of 75% of i:FAO’s shareholders and regulatory approvals.
_  The tender offer price is €15.00 per share, resulting in an enterprise valuation of €67.2 million for i:FAO Group.
_  I:FAO’s acquisition will allow Amadeus to deliver an innovative and attractive end-to-end solution to corporations, including Expense Management.

April 4 Sydney, 2014: Amadeus, the leading technology partner to the travel industry, today announced its intention to acquire i:FAO through a tender offer process, conditional upon acceptance by a minimum of 75% of shareholders and regulatory approvals. Mr Louis Arnitz, the Chief Executive Officer of i:FAO Group, and other major shareholders have committed to sell their shares into the tender offer to be launched by Amadeus.  In total, Amadeus has secured 68.5% of i:FAO’s share capital in the form of irrevocable undertakings to tender. i:FAO Group is a leading provider of travel management technology solutions for corporations in Germany and is traded on the Frankfurt Stock Exchange.

“This deal extends our reach and further develops our offering in a key area, and will significantly increase our growth opportunities in the Corporate Travel IT business”, said Holger Taubmann, Senior Vice President, Distribution, at Amadeus. “Corporations are one of the biggest consumers of travel services, and they account for about 45% of all trips made worldwide. The Corporate Travel IT business – focused on providing corporations with applications to help automate travel policy, handle their booking flow and simplify the travel expense claim process – is currently estimated at around €2 to €3 billion a year, with significant growth expected over the next years”.

“Since 1998, i:FAO has developed into a leading Corporate Travel IT company in the German speaking countries – Germany, Austria, Switzerland –, with a growing presence in the United Kingdom, Scandinavia and Central Europe”, said Mr Louis Arnitz, Founder and Chief Executive Officer of i:FAO Group. “Our experience, though, tells us that, more and more, global end-to-end travel IT solutions are critical for big multinational corporations’ requirements. Becoming part of a truly global leader in the travel industry with Amadeus, will allow us to develop the ability to meet our customers’ requirements worldwide.”

I:FAO Group, headquartered in Frankfurt and with its main development sites in Sofia (Bulgaria), has a significant presence in the German Corporate Travel IT market through its flagship cytric solution, which has an open and flexible architecture that allows easy customization to specific clients requirements. i:FAO will bring established relationships with blue-chip corporate customers. As a result of the deal, around 170 professionals, including i:FAO Group’s executive management team and more than 100 developers will join Amadeus.

In 2013, i:FAO Group obtained revenues of €14.4 million, with a 10.6% increase compared to 2012, and a compound annual growth rate (CAGR) of 11.1% for the 2005- 2013 period. In that same period, EBITDA showed a CAGR of 22.1%. In 2013 EBITDA was €4.6 million and EBITDA margin reached 32%.

Agreement with i:FAO Group shareholders

Amadeus has secured irrevocable undertakings with investors owning 68.5% of i:FAO Group who have committed to sell their shares into the tender offer to be launched by Amadeus. Amadeus intends to set a threshold of a minimum of 75% of the shares being tendered for the deal to be completed. Under the terms of the agreement, Amadeus will pay €15.00 per share with a total enterprise value – after cash adjustments – of €67.2 million.

The tender offer needs to be approved by the German stock market regulators (Bafin). The transaction will also be subject to approval by the German antitrust authority (BKartA).

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