Amadeus, which reaped a handsome profit in the first half of 2018, has given its airline-booking wing a solid hospitality base by agreeing to buy New York-based TravelClick from Thoma Bravo, the private equity investment firm.
The price was USD 1.52 billion, which converts to slightly more than AUD 2 billion.
TravelClick is a leading hospitality global provider that serves more than 25,000 customers across 176 countries. Amadeus said yesterday that the addition of TravelClick to the Amadeus portfolio would create “a hospitality leader providing a broad range of innovative technology to hotels and chains of all sizes across the globe”.
Thoma Bravo bought TravelClick from another private equity company, Genstar, in 2014 for USD 930 million, so Thoma Bravo has made about USD 600 million in four years from the two transactions. At USD 150 million a year, it won’t be complaining.
The deal works for Amadeus too. The Madrid-based GDS says the acquisition will significantly expand its presence in the hospitality sector.
Amadeus recently declared an adjusted profit of EUR 606.8 million (about AUD 950 million) for the first half of 2018.
“Addition of TravelClick’s cloud-based solutions for mid-chain and independent hotels will enable Amadeus to reach all segments of the market with an en-hanced portfolio.”
TravelClick provides cloud-based platforms including an independent and mid-size hotel Central Reservation System (CRS) and Guest Management Solution (GMS), as well as business intelligence and media solutions. This portfolio gives hotels distribution reach across all channels, both digital and traditional.
It also allows them to improve digital interaction with guests, increase revenues and performance, reduce cost and create a strong brand.
“The addition of TravelClick’s solutions to the Amadeus portfolio will create a hospitality leader providing a broad range of innovative technology to hotels and chains of all sizes across the globe,” an Amadeus statement said yesterday.
“TravelClick has a great team, great technology and a broad customer base, and we are looking forward to welcoming such a successful business into Amadeus,” said Amadeus president and chief executive, Luis Maroto, stated,
“Our ambition is to provide the hospitality industry with the tools they need to grow their businesses and deliver a great experience to their guests. The combination of our two portfolios will allow us to provide that to hotels of all shapes and sizes across the world.”
As part of the acquisition, about 1100 TravelClick employees are expected to join Amadeus.
Amadeus and Thoma Bravo expect to close the acquisition in the fourth quarter of the calendar year 2018, following regulatory approvals. The transaction will be debt-financed and immediately earnings accretive.
Amadeus announced its stellar first-half earnings just two weeks ago. The adjusted profit of EUR 606.8 million for the first half of 2018 represents growth of 6.1% compared to the same period last year. Amadeus’ revenue grew 4.1% from January to June compared to the first half of 2017. In the distribution segment, travel agency air bookings reached 305.1 million, which represents growth of 3.4%. Passengers boarded increased 18% to 888.8 million.
Not long before that, Amadeus became one of the first providers to achieve the International Air Transport Association (IATA) Level 3 New Distribution Capability (NDC) as an aggregator and an IT provider.
Level 3 is the highest NDC certification and is awarded to companies that can demonstrate the ability to execute offer and order management, meaning that Amadeus is able to consume NDC offers from airlines and distribute them to travel sellers.
Written by Peter Needham
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