13 Aug 2018

Amadeus ups the hospitality ante with TravelClick deal

Amadeus has announced plans to buy TravelClick for $1.52 billion from private equity investment firm Thoma Bravo, in an effort to grow its footprint in the hospitality sector.

 The purchase gives Amadeus access to TravelClick’s cloud-based Central Reservation System (CRS) and Guest Management Solutions (GMS) solutions for mid-chain and independent hotels, as well as the company’s business intelligence and media solutions.

 NY-based TravelClick currently serves 25,000 customers across 176 countries and employs 1,100 people, all of whom are expected to join Amadeus after the purchase. The company generated $373 million in revenue in 2017 and $86 million in EBIDTA.

Luis Maroto, President and CEO of Amadeus said:

“Our ambition is to provide the hospitality industry with the tools they need to grow their businesses and deliver a great experience to their guests. The combination of our two portfolios will allow us to provide that to hotels of all shapes and sizes across the world.”

 In its recent half-year update, Amadeus had said it planned to focus on growth in the hospitality sector, as well as other sectors beyond flights. Speaking on a media call about the acquisition, Francisco Pérez-Lozao, senior vice-president, Strategic Growth Business at Amadeus said the company’s goal was to become “an end-to-end IT” solution in the travel sector.

“We have built our growth organically and through acquisitions,” he said. “On one side, TravelClick brings a complementary..solutions portfolio..TravelClick also brings us brand recognition..and a strong team of experts in the industry.”

In the company’s formal announcement Pérez-Lozao said:

“This is a huge step forward for Amadeus in hospitality. While we have already made strong progress with the large chains, TravelClick gives us access to the mid-chain and independent hotel segment that makes up almost three-quarters of the market. We can now serve the entire industry with a very broad portfolio of solutions and we are looking for significant growth in the years ahead.”

 On the call, Larry Kutscher, CEO of TravelClick, said that one-third of the company’s revenue comes from its CRS, though the company’s data-driven GMS is also competitively strong and it is the leading travel agent media provider with its media solutions.

The company also generates revenue through its Business Intelligence product, with data sourced from across the travel ecosystem, which it offers through a mix of subscription and transaction based models. 

 Holden Spaht, a managing partner at Thoma Bravo said of the deal:

“TravelClick is an excellent example of Thoma Bravo’s proven investment approach of acquiring a best in class vertical market software company and working alongside talented leadership to implement operational best practices and drive growth both organically and through M&A.”

 The acquisition, which is pending regulatory approvals, is expected to close during the fourth quarter of 2018.