- Transaction value of approximately $570 million on a cash-free,
debt-free basis, subject to certain assumptions and purchase price
adjustments
- Acquisition to provide CWT customers with more choice and
value
- Transaction projected to create greater capacity for investment
in software and services
- Expected to deliver significant shareholder value through
synergy opportunity and efficiency gains from the combination, with
approximately $155 million of synergies identified
- Investor conference call scheduled for today at 08:30 A.M.
Eastern Time
American Express Global Business Travel (“Amex GBT”), which is
operated by Global Business Travel Group, Inc. (NYSE: GBTG) (“Amex
GBT” or the “Company”), a leading B2B software and services company
for travel and expense, has today announced it entered into a
definitive agreement to acquire CWT, a global business travel and
meetings solutions provider, in a transaction that values CWT at
approximately $570 million on a cash-free, debt-free basis, subject
to certain assumptions and purchase price adjustments. The
transaction will be funded by a combination of stock and cash and
is expected to close in the second half of 2024, subject to the
satisfaction of customary closing conditions, including the receipt
of certain regulatory approvals.
CWT serves 4,000 customers and is expected to generate
approximately $850 million of revenues and $70 million–$80 million
of Adjusted EBITDA in 2024.
Paul Abbott, Amex GBT’s CEO, said: “Bringing CWT onto the proven
Amex GBT software and services model will create more choice for
customers, more opportunities for people and more value for
shareholders.”
After the acquisition closes, CWT customers would have access to
Amex GBT’s proprietary software and services for travel and
expense, including Neo1, Neo and Egencia, in addition to Select,
which enables customers to integrate with leading technology
partners. Customers would have access to the broadest portfolio of
professional services, including meetings and events, consulting
and sustainability solutions and Amex GBT’s marketplace would
provide access to the most comprehensive and competitive content in
the industry.
CWT CEO, Patrick Andersen, said: “Joining forces with Amex GBT
helps accelerate our vision of a tech-enabled future for business
travel, where people and technology combine to deliver an
exceptional customer experience. We are highly confident in the
value creation of the combined company.”
Significant Shareholder Value
- Highly attractive valuation and financial return: Based
on CWT estimated 2024 Adjusted EBITDA of $70 million–$80 million
and $155 million of identified synergies, Amex GBT acquiring CWT
for pre-synergy multiple of 7.6x and post-synergy multiple of 2.5x
Adjusted EBITDA. Based on CWT estimated 2024 revenue of
approximately $850 million, Amex GBT acquiring CWT for 0.7x revenue
multiple.
- Synergy opportunity: Identified approximately $155
million of annual run-rate synergies within three years, with
approximately 35% expected to be realized in 2025. Amex GBT has a
proven track record of delivering significant synergies through
acquisitions. A dedicated integration team will execute the synergy
plan.
- Strong balance sheet and leverage profile: Amex GBT
maintains a strong balance sheet and post-deal leverage stays
within Amex GBT’s target range of 1.5x–2.5x.
- Accretive transaction: Expected to be break-even to
earnings per share in the first year of transaction close and
accretive thereafter.
Transaction Overview
- The transaction values CWT at approximately $570 million on a
cash-free and debt-free basis, subject to certain assumptions and
purchase price adjustments. At the closing of the transaction Amex
GBT expects to issue approximately 71.7 million shares of its
common stock at a fixed price of $6.00 per share and to use cash on
hand to fund the retirement of CWT debt and the remaining
transaction consideration. The CWT shareholders, which are
primarily investment funds, are subject to a 90-day lockup for 50%
of their shares and a 270-day lockup for the remainder of their
shares. Both companies’ boards of directors have approved the
transaction, which is expected to be completed in the second half
of 2024, subject to the satisfaction of customary closing
conditions, including the receipt of certain regulatory
approvals.
- Amex GBT acquiring CWT for pre-synergy multiple of 7.6x and
post-synergy multiple of 2.5x Adjusted EBITDA, based on CWT
estimated 2024 Adjusted EBITDA of $70 million –$80 million and $155
million identified synergies.
- Amex GBT acquiring CWT for 0.7x revenue
multiple, based on CWT estimated 2024 revenue of approximately $850
million.
Investor Conference Call Information
Amex GBT will hold a live investor conference call on March 25,
2024, at 8:30 AM ET. The live investor conference call and
accompanying slide presentation can be accessed on the Amex GBT
Investor Relations website at
investors.amexglobalbusinesstravel.com. A replay of the event will
be available on the website for at least 90 days following the
event.
About Amex GBT
American Express Global Business Travel (Amex GBT) is a leading
software and services company for travel, expense, and meetings
& events. We have built the most valuable marketplace in travel
with the most comprehensive and competitive content. A choice of
solutions brought to you through a powerful combination of
technology and people, delivering the best experiences, proven at
scale. With travel professionals and business partners in more than
140 countries, our solutions deliver savings, flexibility, and
service from a brand you can trust – Amex GBT.
About CWT
CWT is a global business travel and meetings solutions provider,
with whom companies and governments partner to keep their people
connected, in traditional business locations and some of the most
remote and inaccessible parts of the globe. A private company
majority owned by funds affiliated to Redwood Capital Management
and Monarch Alternative Capital amongst others, CWT provides its
customers’ employees with innovative technology and an efficient,
safe, and sustainable travel experience.
Forward-Looking Statements
This communication contains statements that are forward-looking
and as such are not historical facts. This includes, without
limitation, statements regarding our financial position, business
strategy, and the plans and objectives of management for future
operations and full-year guidance. These statements constitute
projections, forecasts and forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The words “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “will,” “would” and
similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not
forward-looking.
The forward-looking statements contained in this communication
are based on our current expectations and beliefs concerning future
developments and their potential effects on us. There can be no
assurance that future developments affecting us, including as a
result of the transaction, will be those that we have anticipated.
These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond our control) or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, the following risks, uncertainties and
other factors: (1) changes to projected financial information or
our ability to achieve our anticipated growth rate and execute on
industry opportunities; (2) our ability to maintain our existing
relationships with customers and suppliers and to compete with
existing and new competitors; (3) various conflicts of interest
that could arise among us, affiliates and investors; (4) our
success in retaining or recruiting, or changes required in, our
officers, key employees or directors; (5) factors relating to our
business, operations and financial performance, including market
conditions and global and economic factors beyond our control; (6)
the impact of geopolitical conflicts, including the war in Ukraine
and the conflicts in the Middle East, as well as related changes in
base interest rates, inflation and significant market volatility on
our business, the travel industry, travel trends and the global
economy generally; (7) the sufficiency of our cash, cash
equivalents and investments to meet our liquidity needs; (8) the
effect of a prolonged or substantial decrease in global travel on
the global travel industry; (9) political, social and macroeconomic
conditions (including the widespread adoption of teleconference and
virtual meeting technologies which could reduce the number of
in-person business meetings and demand for travel and our
services); (10) the effect of legal, tax and regulatory changes;
(11) the decisions of market data providers, indices and individual
investors; (12) the outcome of any legal proceedings that may be
instituted against Amex GBT or CWT following the announcement of
the transaction; (13) the inability to complete the transaction;
(14) delays in obtaining, adverse conditions contained in, or the
inability to obtain necessary regulatory approvals or complete
regulatory reviews required to complete the transaction; (15) the
risk that the transaction disrupts current plans and operations as
a result of the announcement and consummation of the transaction;
(16) the inability to recognize the anticipated benefits of the
transaction, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with customers and
suppliers and retain key employees; (17) costs related to the
transaction; (18) risks related to the business of Cape or
unexpected liabilities that arise in connection with the
transaction or the integration with Cape; (19) the risk that the
assumptions, estimates and estimated adjustments described in this
communication may prove to be inaccurate; and (20) other risks and
uncertainties described in the Company’s Form 10-K, filed with the
SEC on March 13, 2024, and in the Company’s other SEC filings.
Should one or more of these risks or uncertainties materialize, or
should any of our assumptions prove incorrect, actual results may
vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income (loss) before interest
income, interest expense, gain (loss) on early extinguishment of
debt, benefit from (provision for) income taxes and depreciation
and amortization and as further adjusted to exclude costs that
management believes are non-core to the underlying business of the
Company, consisting of restructuring, exit and related charges,
integration costs, costs related to mergers and acquisitions,
non-cash equity-based compensation, fair value movements on earnout
and warrant derivative liabilities, long-term incentive plan costs,
certain corporate costs, foreign currency gains (losses),
non-service components of net periodic pension benefit (costs) and
gains (losses) on disposal of businesses.
This communication contains non-GAAP financial measures related
to the anticipated acquisition. Amex GBT believes these
forward-looking non-GAAP measures are of interest to investors. We
have not reconciled these forward-looking non-GAAP measures to
their corresponding GAAP measures because certain items that impact
these measures are unavailable without unreasonable efforts, out of
Amex GBT’s control and/or cannot be reasonably predicted without
unreasonable efforts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240325881910/en/
Media: AmexGBT@SloanePR.com Investors: Jennifer Thorington Vice
President Investor Relations investor@amexgbt.com
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