Sabre to Acquire SynXis Corporation
In a move to further expand its services to the hotel industry, Sabre Holdings Corporation today announced it has reached an agreement to acquire SynXis Corporation, a privately-held provider of reservation management, distribution and technology services for hotelsThe SynXis reservation system has gained significant marketplace traction as its hotel base has expanded to about 6,000 hotel properties. It enables hoteliers and chains to simplify complex tasks to sell hotel inventory in a multi-channel world. Through the SynXis system, hotel properties are able to seamlessly sell through global distribution systems (GDSs), including the Sabre GDS, as well as over 1,200 third party Internet travel sites, and hotel reservation offices/central reservation centers.
“With SynXis, we have the opportunity to deliver an even broader range of services to meet the needs of the hotel industry, which is the largest segment of travel today,” said Eric Speck, chief marketing officer, Sabre Holdings. “We can provide hoteliers with the ability to sell more rooms more efficiently, and simplify the process at the point of sale where they are issued. It also enables us to expand and deepen our relationships with hotel properties and better serve the hotel requirements for all of our agents, online and offline.
“This move reinforces our belief that the best way to give travelers what they need is to make sure that suppliers get what they need, too—in this case, compelling technology that can automate the hotel reservation process and provide hoteliers with a single view of inventory,” Speck added.
The $40 million cash transaction is expected to be neutral to Sabre Holdings earnings per share on an adjusted basis in 2005 and slightly dilutive on a GAAP basis in 2005 due to the amortization of certain intangibles. The proposed transaction is expected to generate tax deductions that will effectively reduce Sabre Holdings cost of the acquisition by approximately $6 million, to approximately $34 million.
Sabre Holdings expects to close the transaction in the first quarter of 2005 subject to customary closing conditions. After closing, SynXis, headquartered in McLean, Va., and its two operating subsidiaries, SynXis International Holdings, B.V. and HubX, Inc., will continue to offer its extensive range of services under the SynXis brand.
Through the proposed acquisition, Sabre Holdings expects to increase hotel transaction revenues generated through the SynXis system. The move is also expected to further extend SynXis Corporation’s existing relationships with Sabre Holdings, including the Sabre Travel Network and Travelocity. In May of this year, SynXis signed an agreement to include its hotel customers in the Travelocity merchant model hotel program.
Sabre Holdings also plans to extend the benefits of the SynXis product to other hotels, offering the technology that is in use today at about 6,000 hotel properties, primarily in the U.S. and Europe. These property relationships are also expected to benefit travel agents, offline and online, with more accurate information about hotel room availability and rates.