Travelport To Launch IPO On London Exchange

Travel technology company Travelport this week announced its intention to float on the London Stock Exchange. The initial public offering is expected to place about 50 percent of the company's equity in public ownership in the next four to six weeks.

Travelport hopes to raise $1.775 billion from the flotation. It already has banked $225 million as the Singapore Investment Corp., owned by the Singapore government, bought a 7.19 percent stake in the company last month, Travelport said today.

At present, the largest investor in Travelport is the private equity company Blackstone. The IPO will reduce its shareholding to around 50 percent if fully subscribed. If that happens, Blackstone and other existing shareholders, including investment companies One Equity Partners and Technology Crossover Ventures as well as past and present management, will put up to another 15 percent of their shares on the market.

Travelport said the combined raised capital of $2 billion will be used to reduce its indebtedness, but group deputy CEO Gordon Wilson told EuroBTN that proceeds from the possible sale of an additional 15 percent would be retained by existing shareholders.

Travelport has a history of both private and public ownership, but Wilson said now is the right time for it to be listed again. "Different ownership structures were good for it at different stages of its evolution," he said. "Being owned by a private equity backer enabled us to do some things it is easier to do as a private company, like consolidating, restructuring and investing in new services, which has cost us about $475 million over the last couple of years. Taking the company public enables a company like ours with growth prospects to go forward. We can pay down our debt, which frees up more funds."

Wilson, who is also president and CEO of Travelport's GDS business, added that one of his major strategic targets for 2010 is growth for the company's online booking tool, Traversa. "It is fair to say we were slightly late to market with an online booking tool and we haven't invested as much as we should have done," he said. Traversa launch customer IBM, which also helped develop the tool, in 2010 will extend its use from 20 countries to 70, Wilson said. Two other major unidentified companies also rolled out Traversa in the United States last year.

Today's announcement scoops major rival Amadeus, which is also widely expected to announce an IPO in the first quarter. It would appear both companies have decided to float instead of merge, an option that was widely rumored to have been explored by their private shareholders last autumn.

A statement from Travelport said that its revenue in the first nine months of 2009 was $1.715 billion and adjusted earnings were $494 million. No comparative figures for the same period in 2008 were offered. The statement added that billable transaction units in the fourth quarter of 2009 were 5 percent higher than in the same quarter in 2008.

As part of its preparations for listing, Travelport has appointed Dermot Gleeson, former non-executive chairman of Allied Irish Bank and former Irish attorney general, as its non-executive chairman. Travelport has appointed three additional non-executive directors, all from outside the travel industry.

"If we achieve this," said Wilson, "it will be the biggest IPO in London in the last two years and the biggest technology IPO in London in the last four years."