Blackstone Preps Travelport for a $3 Billion IPO

Posted Jan 19th 2010 12:20PM by Tom Taulli
Filed under: Private Equity, Blackstone Group L.P (BX), Initial Public Offerings

For a mega private equity firm like Blackstone (BX), there's a need to get liquidity on a mega scale. So this week, the firm prepared for one of its holdings, Travelport, to go public. The deal could be worth as much as $3 billion.

Blackstone will float the deal on the London Stock Exchange. There will also be the issuance of 7.2% of the stock to Government of Singapore Investment Corp. (for about $225 million).

Founded more than 30 years ago, Travelport has built a comprehensive set of services for the airline industry. First, the company operates brands like Galileo and Worldspan, which allow for bookings across the globe (of course, using Web-based e-commerce systems). There is also a 48% equity stake in Orbitz (OWW).

Next, there is a travel intermediary, Gullivers Travel Associates (GTA), that wholesales travel tours. Finally, Travelport has Airline IT, which helps airlines develop software platforms.

With about 5,300 employees, Travelport posted revenues of $1.7 billion and EBITDA of $494 billion in the first nine months of last year. The company also has a hefty debt load of $4.1 billion. But, of course, the IPO proceeds will help to reduce this substantially.

Interestingly enough, Travelport attempted an IPO in late 2007 but it had to be scrapped because of the global credit crisis. However, things have certainly improved since then, which is good news for Blackstone. The firm owns about 70% of Travelport's shares.

The underwriters on the deal include UBS (UBS), Barclays (BCS), Citigroup (C), Credit Suisse (CS) and Deutsche Bank (DB).

Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: Blackstone, BX, inthenews, IPO, Travelport