The largest business-to-business travel platform is going public via SPAC merger announced Friday morning.
The SPAC Deal: American Express Global Business Travel (GBT) announced a SPAC deal with Apollo Global Management Inc APO-backed SPAC Apollo Strategic Growth Capital APSG.
The deal values American Express Global Business Travel at a pro forma market capitalization of $5.3 billion.
A PIPE of $335 million includes investments from existing investors and adds new investors Sabre Corp SABR and Zoom Video Communications Inc ZM.
“Commitments from new investors like Zoom, Sabre, Apollo, Ares and HG Vora are a huge vote of confidence in our business and the future of business travel, and meetings and events,” GBT’s CEO Paul Abbott said.
American Express Company AXP and Expedia Group Inc EXPE remain two of the largest shareholders owning 30% and 14% of the company respectively.
Public APSG shareholders are expected to own 15.4% of the new company. The new company will trade under the ticker GBTG on the NYSE. The merger is expected to close in the first half of 2022.
Related Link: Zoom Video Q3 Earnings Highlights: Revenue Up 35%, $100K Customers Grow 94%
About American Express Global Business Travel: Operating in the $330 billion managed global business travel industry, GBT is the leader in the industry with $39 billion in transaction volume, according to figures from 2019.
GBT was spun off from American Express in 2014. The company has an 11-year agreement at the of the merger close to use the American Express trademark.
The company had 19,000 corporate customers in 2019. According to the company’s presentation, it counts five of the 10 largest U.S. banks, five of the 10 largest U.S. healthcare companies and 40 of the top 100 customers by travel spending as customers.
Growth Ahead: GBT sees a $1.4 trillion industry through its different target travel areas and said it has a “significant runway for growth.”
The company said it is well-positioned for recovery in the large travel sector.
Zoom’s Chief Financial Officer Kelly Steckelberg highlighted the investment in GBT leading to “innovative and engaging virtual, face-to-face, and hybrid meeting and event experiences.”
GBT has grown over the years through acquisitions and highlighted M&A as an area for future growth.
Financials: GBT had a transaction volume of $39 billion in 2019 and $2.8 billion in revenue. The company reported that 67% of transactions in 2019 were done digitally. No individual customer makes up more than 6% of company revenue.
In 2019, the company had revenue split as 76% travel and 24% product and professional services.
The U.S. region makes up 48% of company revenue with EMEA at 36%, APAC at 9% and Americas ex U.S. (any country outside of the U.S.) at 6%.
GBT is forecasting revenue of $828 million in fiscal 2021 and $1.63 billion in fiscal 2022.
APSG Price Action: APSG shares are up 1.12% to $9.94 on Friday morning at publication.
Photo by Amy Humphries on Unsplash
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