Amadeus Buys Hotel Tech Firm TravelClick for $1.5 Billion
The deal represents a modest win for private equity firm Thoma Bravo. In 2014, the company bought New York City-based TravelClick from another private equity firm, Genstar Capital, for $930 million.
The acquisition price was a multiple of about 2.5 times TravelClick’s 2017 revenue of $373 million. It was about 17 times the company’s earnings before interest, taxes, depreciation, and amortization for last year of $86 million.
TravelClick said it has more than 25,000 customers, primarily independent and mid-size hotels, which use its central reservation system, guest management tool, and its business intelligence and media software.
Amadeus already has been investing in its hospitality solutions business by building a platform of tools. Its two largest customers are InterContinental Hotels Group (IHG) and Premier Inn. But the bulk of the hospitality market is mid-size and independent hotels, which TravelClick has a wide customer base with.
But Amadeus’s platform has had some gaps in the tools it offers, particularly in business intelligence services and for customer relationship management.
Multiple industry experts said that TravelClick’s crown jewel is its business intelligence service, an offering that Amadeus wholly lacked.
“Their property reach is unmatched and potentially gives Amadeus an install base across which to hopefully deploy the productized version of its custom-built IHG guest reservation system,” said Sundeep Chanana, CEO of investment bank Horatio Partners.
“The combination of our two portfolios will allow us to provide that to hotels of all shapes and sizes across the world,” said Luis Maroto, President and CEO of Amadeus, in a prepared statement.
The sale is a victory of sorts for Larry Kutscher, who was brought in by private equity to be a CEO of TravelClick and to make it attractive for a sale. Kutscher tightened filled some product gaps in customer relationship management, loyalty management software, and email marketing, by buying two companies with that technology: ZDirect, a customer relationship management platform, in 2015, and Digital Alchemy, a tech vendor.
The company is not without its flaws. If Amadeus decides to keep TravelClick’s central reservation system, iHotelier, it will need to invest to upgrade it to compete in the marketplace. The same applies for TravelClick’s channel manager, which isn’t industry-leading, experts said.
“The market was expecting more transformative deals during TravelClick’s ownership tenure at Thoma,” said Chanana.
Amadeus’ acquisition will mean it will be competing more directly with the current mid-market and independent hotel software leaders Oracle Hospitality and Sabre Hospitality.
About 1,100 TravelClick employees are expected to join Amadeus after the deal closes at the end of the year, the companies said,.
Photo Credit: TravelClick provides business intelligence and technology services to hotels, including Loews Hotels and Resorts. Pictured is the lobby of the Loews Annapolis Hotel. Loews Hotels & Resorts
Source of this (above) article: https://skift.com/2018/08/10/amadeus-buys-travelclick/