Friday Nov 15, 2024
Friday Nov 15, 2024
Monday, 25 May 2015 00:00 - - {{hitsCtrl.values.hits}}
Sabre has entered into a definitive agreement to acquire Abacus International, a global distribution system (GDS) in the Asia Pacific region.
Abacus is currently owned by a consortium of 11 Asian airlines along with Sabre, which has a 35% stake in the company. Sabre will purchase the remaining portion of Abacus for net cash consideration of $ 411 million.
“The Asia Pacific travel market is the largest and fastest growing in the world,” said Sabre President and CEO Tom Klein. “Acquiring Abacus immediately combines the global capabilities of Sabre with the deep local market expertise of the leading Asia-Pacific GDS. This powerful combination will give customers even more innovation and service options, while allowing Sabre to accelerate growth globally in a very capital efficient way – and to gain regional synergies in all three of our businesses serving travel agents, airlines and hospitality companies.”
Abacus serves more than 100,000 travel agents across the Asia Pacific region’s 59 markets and has both global and local relationships with airlines and hotels, including a portfolio of low-cost content and Chinese airline content.
Separately, the acquisition includes new long-term distribution agreements between Sabre and the 11 airline owners of Abacus.
Abacus will operate as a region of Sabre Travel Network, and Sabre expects its expanded Asia Pacific direct presence will benefit Sabre Airline Solutions and Sabre Hospitality Solutions, which already provide mission-critical support to 78 airlines and thousands of hotels throughout the Asia Pacific region. Sabre also will continue its partnership to provide technology services to INFINI, a local Japanese GDS.
“Sabre and Abacus have established the gold standard for service and content in the Asia Pacific region and that only gets better,” Klein said. “Together with Abacus, Sabre will provide customers and suppliers with improved and faster access to Sabre’s industry-leading innovations, including low-cost carrier content, ancillary capabilities, data analytics, and the latest in mobile solutions and personalisation services. Additionally, airlines and travel agencies will have more options for new and differentiated products and services created specifically for customers in the Asia-Pacific market.”
Subject to regulatory approvals and other closing conditions, the transaction is expected to close in the third quarter of 2015.
The acquisition, including associated working capital adjustments and cash acquired, is expected to be financed through approximately $ 250 million in cash on hand, augmented by incremental net debt of approximately $ 160 million. Pro forma for the transaction, Sabre estimates its 31 March 31 net debt to trailing twelve months Adjusted EBITDA ratio would be 3.3x, compared to 3.0x as reported.
Assuming a third quarter closing date, Sabre expects the transaction will increase 2015 revenue by approximately $ 120 million, be approximately neutral to 2015 Adjusted EPS and modestly accretive to current-year Adjusted EBITDA.
In 2016, Sabre said it expects the transaction to increase revenue by more than $ 300 million, to increase Adjusted EBITDA by approximately $ 50 million and to be accretive to Adjusted EPS by approximately $ 0.05.
