Private Equity News & Analysis

Blackstone consolidates holiday sector with $1.4bn bolt on acquisition

Blackstone will consolidate its position in the holiday sector with a bolt on acquisition of rival company Worldspan, underlining the recent popularity of travel businesses.

By
Jenny Bollen
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Blackstone will consolidate its position in the holiday sector with a bolt on acquisition of rival company Worldspan, underlining the recent popularity of travel businesses.

Travelport, a holiday business owned by private equity firm Blackstone and Californian venture capital company Technology Crossover Ventures, will bolt on rival travel company Worldspan for $1.4 billion (€1 billion).

Travelport: bolting on rival company for $1.4 billion

The sale is subject to regulatory approval.

Travelport said the initial integration will focus on consolidating technology and administrative operations, which is expected to save approximately $50 million. Management also sees opportunity to cross-sell Worldspan’s technology products to Travelport’s global customer base.

Credit Suisse, Lehman Brothers and UBS acted as financial advisors to Travelport.

Travelport operates 20 brands including Galileo, a global distribution system; Orbitz, an online travel agent; and Gulliver’s Travel Associates, a wholesaler of travel content. In 2005 Travelport reported revenues of $2.4 billion.

Blackstone bought Travelport from travel and real estate company Cendant in June for $4.3 billion in cash.

Earlier this week Sequoia Capital India and Battery Ventures injected $15 million into Travelguru in a second-round of funding for the Indian online travel portal. 

Last month Esprit Capital Partners, the venture team formed in the merger of Prelude Ventures and Cazenove Private Equity, backed Lastminute.com founder Brent Hoberman in an $11 million funding of Where Are You Now?, a travel and lifestyle social network.

In October ECI Partners, a mid-market buyout specialist, sold Kirker Travel, an independent provider of luxury holidays to Europe, Africa, Asia and New York, for $29.5 million.

Founded in 1985, Blackstone made the largest private equity deal ever last month when it took over Sam Zell’s Equity Office Properties Trust, the largest publicly traded owner of offices in the US, for $36 billion, including the assumption of $17 billion of debt.