EDS-less BTI To Go w/WTP?

<B> EDS-less BTI To Go w/WTP?</B>

By Sarah Welt

<I>Northbrook. Ill.</I> - BTI Americas' future is up in the air for the next 120 days as its president Ralph Manaker and his new partner, WorldTravel Partners CEO Jack Alexander, huddle to work out the details.

One thing already seems decided. BTI Americas is beginning to pull its technology--long outsourced to Electronic Data Systems--back inhouse, as the Plano, Texas provider gives up its financial stake in the nation's fourth-largest agency.

Said Manaker, "We had outsourced a whole bunch of MIS-related things to EDS. Under the new agreement, they are running some technology for us, but we are basically taking over responsibility for running our own data centers and MIS."

BTI Americas had a 10-year agreement with EDS to help roll out Sabre Business Travel Solutions as well as BTI's point of sale system, Mantis. EDS vice president Pat Carey, a former BTI employee who transferred to EDS, now will be transferring back to BTI Americas to run its MIS centers. Carey will be a vice president at BTI, though her exact title has not been finalized. Many other employees at EDS also have now come back to BTI Americas.

"We have a team in place that is continuing the rollout of our front office as well as the mid-office and back office product," Manaker said. "The majority of those team members are now BTI employees."

Putting a rest to widespread rumors that Sabre provided significant financial backing for the buyout, John Stow, Sabre's senior vice president of sales and service for North America, said the American Airlines sister company "has no equity investment at all in BTI Americas"--and is "really against putting money in as an equity partner. We think that's the wrong message to send to our other customers."

With BTI making 10 million bookings a year--over 70 percent of them on Sabre--the agency "has always been a good customer and a technology partner." Sabre will continue to assist BTI with technology decisions, helping it address a "challenge in the back office with multiple systems."

Last month, the mega agency announced that its management team, lead by Manaker, purchased ownership in the company with financial support from WorldTravel International and its U.S. subsidiary, WorldTravel Partners. BTI Americas' management will control all equity; WTP, though it provided some financing, does not own any of the company.

Texas financier Murray Holland, who had been chairman and CEO of BTI Americas as well as a large equity owner, remains a minority shareholder and will assume an advisory role.

The seven BTI executives who now have taken ownership of the agency include Manaker, CFO Rick Webking and executive vice presidents Connie Fitzgerald, Tom Lacny, Becky Nichols, Jim Pagano and Lee Turner.

While BTI will be reviewing the technology products offered in the market by WorldTravel Partners' technology subsidiary Travel Technologies Group, "at present, TTG does not have a role in the technology of BTI," Manaker said, though it would be interested in integrating some of its products into the Mantis architecture. "We look at TTG more as a product supplier," Manaker said.

London-based Hogg Robinson plc and the global Business Travel International had been in talks with BTI Americas to provide financial backing for the management buyout. Now that WorldTravel International has come through with the cash, though, "We will not be entering into an equity relationship with Hogg Robinson, though it is something we will continue to consider in the future," Manaker said.

Manaker declined to go into specific details about why the Hogg Robinson financial backing fell through. Now the question is whether BTI Americas will continue to manage the Americas market for BTI, or join WTP's global affiliate, the London-based GTM Travel Management.

Alexander and Manaker have imposed their own timeline of roughly 120 days to make the key decisions about a possible merger, as well as what to do about relationships with global networks. Manaker said that talks of a merger or acquisition are premature and there are no acquisition discussions going on at this point.

WTP also declined much comment. Said Danny Hood, president of corporate travel and technology, "We completed phase one--we provided a loan and we are looking at synergies. Everything else would be speculation at this point."

But the industry is mulling a full merger of BTI Americas and WTP. David Radcliffe, CEO of Hogg Robinson and chief executive of BTI, said such a merger would yield "some strong benefits."

Manaker said a merger with WTP "would make us a much stronger player in the U.S. We would be upwards of $4 plus billion in size. We don't have a great deal of overlap in terms of geographic coverage. The organizations and cultures seem to fit very well together. And in this environment, with continued consolidation, growth through a merger is very attractive. I think if it's good for our clients and good for our employees, we'll do it."

But it's too soon to contemplate global networks, he added. "At the present time we have no plans but to continue our relationship with BTI," he said.

Meanwhile, insiders suggest that Hogg Robinson already is far along in talks with Maritz Travel Co. to replace BTI Americas as its U.S. affiliate. Maritz president and CEO Michael Boland said it and global partner Internet Inc. are "always looking at ways to strengthen the organization."

Said Radcliffe, "We never comment on rumors, but as you would expect, BTI has alternative plans for the U.S. should they be necessary. Clearly, America is important for BTI and therefore it is important to have the right partner."

"At the present time, based on discussions I had with David, I don't anticipate that happening," Manaker said. Still, there is no indication he has "made a decision to stay in BTI as a merged organization. It's premature.