Sabre Holdings, Silver Lake Partners and Texas Pacific Group (TPG) have signed a definitive agreement under which Silver Lake Partners and TPG will acquire Sabre Holdings for $32.75 per share in cash.
The transaction is valued at approximately $5 billion, including the assumption of approximately $550 million in net debt.
The price represents a premium of 30 percent over the Sabre Holdings average closing share price during the 60 trading days ended December 8, 2006.
The board of directors of Sabre Holdings approved the definitive merger agreement and recommended its approval by stockholders.
“After a thorough assessment, we concluded that this transaction represents a compelling outcome for our shareholders, customers and employees,” said Sam Gilliland, Chairman and CEO of Sabre Holdings.
“We are excited about the ability to deliver substantial value today to our shareholders, and we look forward to a strong future, partnering with two preeminent investment firms that are closely aligned with our strategy and long-term objectives. This transaction is a clear endorsement of our business model, our industry leadership and the hard work and dedication of our talented people around the world.”
Greg Mondre, a Managing Director of Silver Lake Partners said, “Sabre has a remarkable track record of pioneering and delivering best-in-class technology solutions for the global travel industry. We look forward to working with Sabre’s talented management team as they continue to deploy technology as a source of competitive advantage and value-add for customers.”
“We are excited by the opportunity to invest in Sabre given its leadership position in travel technology and distribution and the strength of Travelocity and its other leading online brands,” said TPG Partner, Karl Peterson. “Sabre is well positioned to continue innovating and we look forward to helping management profitably build upon this strong franchise.”
Sabre Holdings does not expect changes to its current executive management team, and the company said its corporate headquarters will remain in Southlake.
The completion of the definitive merger agreement is subject to customary closing conditions, including receipt of stockholder and regulatory approval. The closing of the transaction is expected to occur by early in the second quarter of 2007. There is no financing condition to the obligations of TPG and Silver Lake Partners to consummate the transaction, and equity and debt commitments for the full amount of the merger consideration have been received. It is anticipated that the company’s outstanding 2011 and 2016 Notes will remain outstanding.
Goldman, Sachs & Co. and Morgan Stanley serve as financial co-advisors to Sabre Holdings. Bear, Stearns & Co. provided a fairness opinion in connection with the transaction. Latham and Watkins LLP serves as legal adviser to the company in connection with this transaction.
Deutsche Bank and Merrill Lynch serve as financial advisors and financing providers to Silver Lake Partners and TPG, and Cleary Gottlieb Steen & Hamilton LLP serve as their legal advisor for this transaction.