On March 30th, private equity firms Silver Lake Partners and Texas Pacific Group (TPG) completed the buyout for Sabre Holdings. The company has a variety of travel assets, such as Travelocity, Sabre Travel Network and Sabre Airline Solutions.
The deal required $5.4 billion in financing (including fees). Here's the break-down:
| Equity from TPG, Silver Lake | $1,386,205,738 |
| First lien senior secured revolving facility | $500,000,000 |
| First lien senior secured term loan facility | $2,400,000,000 |
| Second lien senior secured term loan facility | $700,000,000 |
Deal background:
Over the past few years, there has been lots of dealmaking in the travel industry. But perhaps the factor that encouraged Sabre to sell out was Blackstone's $4.3 billion buyout of Travelport in June.
By September, Sabre's bankers -- Goldman Sachs Group (NYSE: GS) and Morgan Stanley (NYSE: MS) -- started to place calls to several private equity firms. There was also interest from a strategic party.
By December, Sabre received two formal bids. But it was the offer from Silver Lake/TPG that was the most attractive. The price was for $32.75 per share.
According to the valuation from Goldman Sachs, here's how the deal stacks up with other transactions:
| Enterprise Value Multiple of LTM (last 12 months) EBITDA |
Total Debt Multiple of LTM EBITDA |
|
| Citicorp Venture Capital Equity Partners L.P. and Teachers Merchant Bank/Worldspan, L.P. (March 2003) |
5.0x | 3.1x |
| BC Partners and Cinven Funds/Amadeus Global Travel Distribution, S.A. (January 2005) |
7.8x | 5.4x |
| The Blackstone Group /Travelport Ltd. (June 2006) | 7.6x | 6.3x |
| Travelport Ltd. (a portfolio company of The Blackstone Group) / Worldspan, L.P. (December 2006) |
5.5x | 4.5x |
| Sabre Holdings Corporation (based on management estimates for LTM as of December 2006) |
10.2x | 7.8x |
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
