Travelport Plans London IPO, Joins Growing List of Large Upcoming International Deals

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by: Renaissance Capital IPO Research
Travelport, a leading global provider of transaction processing services to the travel industry, announced plans to go public in what is expected to be London's largest IPO in almost two years. The NY-based company expects to list on the London Stock Exchange on February 12th with a flotation of $1.8 billion, valuing the company at roughly $3 billion. Travelport is selling 50 to 60% of its existing share capital; CEO Jeff Clarke has outlined plans to use net proceeds to repay debt, which is expected to fall from $4.1 billion to $2.3 billion.

The travel company is majority-owned (70%) by private equity giant Blackstone Group (NYSE:BX), which bought the company from Cendant in August 2006 for $4.3 billion. Other major shareholders include One Equity Partners (part of J.P. Morgan Chase (NYSE:JPM), 11%), Technology Crossover Ventures (11%) and management (7%); all existing holders will maintain a stake after the company goes public. Additionally, the Government of Singapore Investment Corporation will purchase $225 million in new shares concurrently with the IPO, giving it a 7.2% stake in the business.

Travelport's lines of business include Global Distribution Systems, which provides specialized travel technology solutions to agencies around the world, Travelport Airline IT Solutions, which offers data intelligence products to leading airlines, and Gullivers Travel Associations (GTA), which sources and distributes hotels, apartments, car hires, sightseeing tours and other travel products. For the nine months ended Sept. 30, 2009, Travelport booked $1.7 billion in revenue and $494 million in adjusted EBITDA. Competitors include other well-known groups such as Orbitz (NYSE:OWW) (in which Travelport owns a 48% stake), Priceline (NASDAQ:PCLN), Expedia (NASDAQ:EXPE) and Amadeus, which is also expected to complete an IPO in the first half of 2010.

Travelport previously filed to go public in December of 2007 but withdrew due to unfavorable market conditions. If completed, this deal will be London's largest IPO since May of 2008, when New World Resources (NWR.LN), a Netherlands-based coal mining company, came to market and raised over $2 billion. Travelport's deal joins other large international IPOs already on the docket, including Russia's United Company RUSAL ($2.2 billion in proceeds) and SUEK ($2 billion), Poland's PZU ($1.7 billion), China's XD Electric ($1.4 billion) and the UK's Pets at Home ($1 billion).

Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), UBS, Barclays (NYSE:BCS) and Citi (NYSE:C) are the joint bookrunners on the deal, for which bookbuilding is set to begin on February 1st.

Disclosure: No positions