American Express Global Business Travel (Amex GBT), operated by Global Business Travel Group, Inc GBTG, entered a definitive agreement to acquire CWT, a global business travel and meetings solutions provider. The transaction values CWT at approximately $570 million on a cash-free, debt-free basis.
CWT serves 4,000 customers and is expected to generate about $850 million of revenues and $70 million – $80 million of Adjusted EBITDA in 2024.
“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,” said Paul Abbott, Amex GBT’s CEO.
The transaction will be funded by a combination of stock and cash and is expected to close in the second half of 2024.
The acquisition is expected to deliver significant shareholder value through synergy opportunity and efficiency gains from the combination, with approximately $155 million of synergies identified, with approximately 35% expected to be realized in 2025.
At the closing of the transaction, Amex GBT expects to issue about 71.7 million shares of its common stock at a fixed price of $6.00 per share and to use cash on hand to fund the retirement of CWT debt and the remaining transaction consideration.
The transaction is expected to be completed in the second half of 2024 and to be break-even to earnings per share in the first year of transaction close and accretive thereafter.
The company held $489 million in cash and equivalents as of December 31, 2023.
Price Action: GBTG shares are trading higher by 3.91% at $5.85 in premarket on the last check Monday.
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