Consolidation in the travel industry continues unabated with today’s announcement global corporate retailer Amex GBT will acquire CWT in a transaction valued at approximately $570 million.
According to Amex GBT, which is operated by Global Business Travel Group, Inc, a B2B software and services company for travel and expense, “has entered into a definitive agreement to acquire CWT, a global business travel and meetings solutions provider, in a transaction that values CWT at approximately $570 million on a cash-free, debt-free basis, subject to certain assumptions and purchase price adjustments. The transaction will be funded by a combination of stock and cash and is expected to close in the second half of 2024, subject to the satisfaction of customary closing conditions, including the receipt of certain regulatory approvals.”
CWT serves 4,000 customers and is expected to generate approximately $850 million of revenues and $70 million–$80 million of Adjusted EBITDA in 2024.
Paul Abbott, Amex GBT’s CEO, said: “Bringing CWT onto the proven Amex GBT software and services model will create more choice for customers, more opportunities for people and more value for shareholders.”
After the acquisition closes, CWT customers would have access to Amex GBT’s proprietary software and services for travel and expense, including Neo1, Neo and Egencia, in addition to Select, which enables customers to integrate with leading technology partners.
CWT CEO, Patrick Andersen, said: “Joining forces with Amex GBT helps accelerate our vision of a tech-enabled future for business travel, where people and technology combine to deliver an exceptional customer experience. We are highly confident in the value creation of the combined company.”
Investment banker Morgann Lesné, of Cambon Partners, comments on volume being the prime factor of success for corporate retailers:
“Business travel is more than any other market a volume play: for the customers, for the suppliers. Size is the only way to make economies of scale and get to relevant levels of profitability. The acquisition of CWT by AMEX GBT will put increasing pressure on the likes of Travelperk and Navan, both of which will have to fight even harder to get to that level of scale that a giant like AmexGBT-CWT is about to become.”
