BC Partners and Cinven, the London-based private equity firms, are reported to have entered an exclusive agreement to acquire Amadeus Global Travel Distribution (Amadeus) of Spain for €4.3 billion ($5.7 billion).
If it completes, the deal will be the largest buyout yet seen in the Spanish market and only the second public-to-private transaction in the country following the €165 million acquisition of leisure group Parques Reunidos by Advent International in December 2003.
According to Dow Jones, Amadeus’ controlling shareholders Air France, Iberia and Lufthansa – which have stakes of 23.4 percent, 18.3 percent and 5.05 percent respectively – have accepted the offer. They will receive around €2 billion for their combined 46.7 percent interest.
Although not currently confirmed, it is understood that the three airlines may reinvest some of their proceeds in order to retain a combined interest of around 40 percent in the newco.
The sale process was launched in August 2004, since when Amadeus shares have risen around 50 percent. The agreed price represents a multiple of around 7.5 times the company’s EBITDA (earnings before interest, depreciation and amortisation).
Amadeus was reported to have attracted a high degree of interest from private equity firms due to its strong cash flow and small level of current debt, creating the opportunity for the asset to be highly leveraged as part of any deal. There is also perceived to be strong growth potential in the travel services sector, particularly through increased use of the internet.
Amadeus is the largest operator of computerised travel reservations in Europe, with a system that gives more than 64,000 travel agencies access to bookings on almost 500 airlines, 51,000 hotels and 50 car rental companies.
With the private equity market in Spain is expected to enjoy a highly productive 2005, this deal alone more than doubles the total €2 billion of investment recorded last year. However, hopes that Spanish telecoms group Auna – valued at around €11 billion – would deliver Europe’s largest ever buyout appear to have been dealt a blow. Reports that Blackstone Group, Carlyle Group and Providence Equity Partners had teamed up to bid for the firm were denied by Auna chairman Alberto Salazar-Simpson, who told Reuters: “There are no conversations at present. There is nothing happening.”