Asia-Pacific’s Leading GDS to Help Accelerate Sabre’s Global Growth
Texas and Singapore, May 14, 2015 /PRNewswire/ -- Sabre Corporation (NASDAQ: SABR) today announced that it has entered into a definitive agreement to acquire Abacus International, the leading global distribution system (GDS) in the Asia-Pacific region. Abacus is currently owned by a consortium of 11 Asian airlines and Sabre, with Sabre holding a 35% stake in the company.
Sabre will pay a net cash consideration of $411 million to acquire the remaining ownership in Abacus.
“The Asia-Pacific region is the world’s largest and fastest-growing travel market,” said Tom Klein, President and CEO of Sabre. “Acquiring Abacus enables us to immediately integrate Sabre’s global capabilities with the deep local market expertise of the leading GDS in Asia-Pacific. This powerful combination will deliver more innovation and service choices to our customers, while allowing Sabre to grow faster globally in a capital-efficient manner and create regional synergies across all three of our businesses that serve travel agencies, airlines and hotels.”
Abacus International President and CEO Robert Bailey added, “With our extensive network across Asia-Pacific, Abacus has built a trusted, distinctive and scaled brand. We now have the opportunity to grow our business more quickly, with the support of our airline shareholders, and expand our footprint within the Sabre group. This is great news for the industry in Asia-Pacific, and we look forward to delivering the benefits of this integration to the diverse segments of the region’s travel industry.”
Abacus currently serves over 100,000 travel agencies across 59 markets in the Asia-Pacific region, and maintains both global and locally unique relationships with airlines and hotels, including a leading mix of low-cost carrier content and content from Chinese airlines.
In addition, the acquisition includes new long-term distribution agreements between Sabre and Abacus’ 11 airline shareholders.
Sabre Travel Network President Greg Webb said, “We look forward to continuing our longstanding relationship with our former partners at Abacus. Our new agreements will benefit travel agencies across Asia-Pacific for many years to come, providing them with confidence.”
“Today, Abacus relies on Sabre technology as the foundation for most of its core business functions, providing a wide range of services to its customers in marketing, distributing, selling and servicing travel products in the Asia-Pacific region,” added Webb. “Combined with deep local market capabilities, this will enable a smooth transition for Asia-Pacific customers, who will continue to benefit from our well-known leading technology while also gaining access to global capabilities.”
Abacus will operate as a regional business within Sabre Travel Network, and Sabre expects its direct expansion in Asia-Pacific will also benefit Sabre Airline Solutions and Sabre Hospitality Solutions. These two businesses already provide critical support to 78 airlines and thousands of hotels in the Asia-Pacific region. Sabre will also continue its relationship with Japan’s local GDS company INFINI, providing it with technology services.
“Sabre and Abacus have set the gold standard for services and content in Asia-Pacific, and we will continue to raise the bar,” said Klein. “Together, Sabre and Abacus will enable customers and suppliers to better and more quickly leverage Sabre’s industry-leading innovations, including low-cost carrier content, ancillary capabilities, data analytics and the latest mobile and personalized solutions. In addition, we will offer new and differentiated products and services tailored specifically for customers in the Asia-Pacific market, providing airlines and travel agencies with more options.”
The acquisition is expected to close in the third quarter of 2015, subject to regulatory approvals and other customary closing conditions.
Including related working capital adjustments and acquired cash, the purchase price is expected to be funded with approximately $250 million of cash on hand and approximately $160 million of incremental net debt. Based on the transaction’s projections, Sabre estimates that its net debt to trailing 12 months adjusted EBITDA ratio as of March 31, 2015, will be 3.3x, rather than the previously reported 3.0x.
Assuming a third-quarter close, Sabre expects the transaction to contribute approximately $120 million in annual revenue in 2015, with minimal impact on 2015 adjusted earnings per share, but a slight increase in 2015 adjusted EBITDA.
In 2016, Sabre expects the transaction to contribute more than $300 million in revenue, approximately $50 million in adjusted EBITDA and about $0.05 in adjusted earnings per share.
Conference Call
Sabre will host an investor conference call on Thursday, May 14, at 11:00 a.m. Eastern Time. A live webcast of the call, including accompanying slides, will be available via the Sabre Investor Relations website at http://investors.sabre.com.A replay of the conference call will be archived and available after the call.
About the Company
Sabre Corporation is a leading technology provider to the global travel and tourism industry. Sabre’s software, data, mobile and distribution solutions are used by hundreds of airlines and thousands of hotels to manage critical operations, including passenger and guest reservations, revenue management, flight, network and crew management. Sabre also operates a leading global travel marketplace, which processes over $110 billion of estimated travel spend annually by connecting travelers and suppliers. Headquartered in Southlake, Texas, USA, Sabre operates in approximately 60 countries around the world.
Website Information
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Forward-Looking Statements
Certain statements in this release are forward-looking statements regarding trends, future events, uncertainties and our plans and expectations regarding future developments. Any statements that are not statements of historical fact are forward-looking statements. In many cases, you can identify forward-looking statements by words such as “will,” “expect,” “intend,” “estimate,” “may,” “potential,” or the negative of these terms or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Sabre’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These potential risks and uncertainties include, but are not limited to, the completion and impact of the acquisition discussed in this release; reliance on transaction volumes in the global travel industry, particularly air travel; adverse global and regional economic and political conditions, including those in Venezuela and Russia; dependence on maintaining and renewing contracts with customers and other counterparties; pricing pressures in the Travel Network business; reliance on relationships with travel buyers; changes affecting travel supplier customers; travel suppliers shifting to alternative distribution models; and competition in the travel distribution and solutions markets. For further information on potential risks and uncertainties that could affect our business and financial results, please refer to the “Risk Factors” section in Part I, Item 1A of Sabre’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the U.S. Securities and Exchange Commission. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outcomes, actions, levels of activity, performance or results. Readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, Sabre undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
About Non-GAAP (Non-GAAP) Explanation of Financial Metrics
This news release mentions unaudited non-GAAP financial metrics, including adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted net income, adjusted earnings per share, and ratios determined based on these financial metrics. We define adjusted EBITDA as adjusted net income, further adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, amortization of prepaid incentive consideration, interest expense, net income tax, and residual reserves (benefits). We define adjusted net income as income (loss) from continuing operations, adjusted for impairments, acquisition-related amortization, losses and other expenses related to debt extinguishment (other, net, restructuring), litigation and taxes (including fines), stock-based compensation, management fees, and the tax impact of adjustments to net income. We define adjusted earnings per share as adjusted net income divided by the applicable number of shares.
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Contact:
Pamela Wong
Director, International Communications
Sabre Corporation
+44-7968902626
pam.wong@sabre.com