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IPO Report: Travelport Worldwide LTD (TVPT)

Travelport Worldwide LTD (TVPT) is a leading travel commerce platform providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry. It is

Travelport Worldwide LTD (TVPT) is a leading travel commerce platform providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry. It is headquartered in Atlanta, GA.

Eightother companies are scheduled for the week of Sept. 22, 2014.  The full IPO calendar is available at IPOpremium.

Manager, Co-managers: Morgan Stanley, UBS Investment Bank, Credit Suisse, Deutsche Bank
Joint-managers:  Cowen & Company, Evercore Partners, Jefferies & Co., Sanford Bernstein, William Blair   

TVPT scheduled a $450 million IPO with a market capitalization of $1.8 billion at a price range midpoint of $15 for Thursday, Sept 25, 2014 on NYSE.  SEC filings


TVPT is a leading travel commerce platform providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry.



Valuation Ratios

Mrkt Cap ($mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing adj loss June 6 mos


Travelport Worldwide LTD (TVPT)










Valuation Ratios

Mrkt Cap ($mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

Dividend yield

Travelport Worldwide LTD ($TVPT)







Sabre Corp ($SABR)







Expedia Inc ($EXPE)
















The rating is neutral

·         Price-to-tangible book ratio is -1.2 (private equity has sucked out as much cash as possible)

·         Consistent record of losing money

·         Sabre Corp ($SABR) has been flat showing losses

·         Expedia's ($EXPE) stock up this year because they are profitable.


TVPT is a leading travel commerce platform providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry.

TVPT facilitates travel commerce by connecting the world’s leading travel providers, such as airlines and hotel chains, with online and offline travel agencies and other travel buyers in its proprietary business to business (“B2B”) travel commerce platform (its Travel Commerce Platform).

TVPT processed over $85 billion of travel spending in 2013. TVPT’s geographically dispersed footprint allows travel providers to generate high yielding and incremental global demand for their perishable and capital intensive travel inventory from customers living in non-domestic, or away, markets, in addition to serving their domestic, or home, markets.

As travel industry needs evolve, TVPT is utilizing its Travel Commerce Platform to redefine the electronic distribution and merchandising of airline core and ancillary products, as well as extending its reach into the growing world of travel commerce beyond air, including to hotel, car rental, rail, cruise-line and tour operators.

In addition, TVPT leveraged its domain expertise in the travel industry to design a unique and pioneering B2B payment solution that addresses the need of travel agencies to efficiently and securely make payments to travel providers globally.

Through its global reach in over 170 countries, distinct merchandising platform with capabilities for value-added content and enhanced user experience, TVPT offers a strong value proposition not only to travel providers, travel agencies and corporations, but also to end travelers.

TVPT’s primarily transaction-based pricing model links its revenue to global travel passenger volume rather than travel spending, thus creating a stable and recurring business model with high revenue visibility.

TVPT has two key categories of customers: travel providers and travel buyers, the latter of which includes travel agencies, travel management companies (“TMCs”) and corporations.

TVPT believes that its Travel Commerce Platform combines state-of-the-art technology with industry leading features, functionality and innovative solutions to address the high-volume and growing transaction processing requirements for the evolving needs of the travel industry.

In 2013, TVPT’s systems processed up to 3 billion travel related system messages per day on a maximum transaction speed of 240 millisecond and approximately 8 billion Application Programming Interface (“API”) calls per month.

TVPT’s advanced search technology aggregates global travel content, filters it through sophisticated search algorithms and presents it in a transparent and efficient workflow for travel agencies, enabling them to create and modify multi-content, multi-modular complex itineraries, issue travel documents, process millions of booking transactions and invoices and transfer secure, cost-effective and automated payments, all on a graphically rich, single user interface.

Intellectual property
Where appropriate,TVPT seeks statutory and common law protection of its material trade and service marks.

The laws of some foreign jurisdictions, however, vary and offer less protection than other jurisdictions for TVPT’s proprietary rights. Unauthorized use of TVPT’s intellectual property could have a material adverse effect on us, and there is no assurance that its legal remedies would adequately compensate TVPT for the damages caused by such unauthorized use.

TVPT relies on technology that it licenses or obtains from third parties to operate its business. Vendors that support TVPT’s core GDS technology include IBM, CA, Inc., SAS Group, Inc., Cisco Systems, Inc., EMC Corporation and Red Hat, Inc. Certain agreements with these vendors are subject to renewal or negotiation within the next year.

In 2010, TVPT obtained licenses to its Transaction Processing Facility operating system from IBM. Associated maintenance, support and capacity are available through December 31, 2016 under an agreement with IBM, and TVPT expects such services will continue to be available to it after December 31, 2016.

The marketplace for travel distribution is large, multi-faceted and highly competitive. TVPT competes with a number of travel distributors, including:

traditional GDSs, such as Abacus, Amadeus and Sabre; 

local distribution systems that are primarily owned by airlines or governmental entities and operated predominately in their home countries, including TravelSky in China, Axess and Infini in Japan, Topas in South Korea and Sirena in Russia; 

travel providers that use direct distribution, including through the use of travel provider websites and mobile applications; 

corporate booking tools, including Concur Technologies, GetThere, Deem, KDS, eTravel and Egencia (although most corporate booking tools interface with a GDS to access the content and functionality offered by the GDS); and 

other participants, including Kayak, TripAdvisor, Yahoo! and Google, which have launched business-to-consumer travel search tools (although bookings are often fulfilled by a GDS) that connect travelers with direct distribution channels and OTAs. 

5% shareholders pre-IPO
Blackstone Funds    9.54 %

Angelo, Gordon Funds    16.91 %

Q Investments Funds     10.70 %

Morgan Stanley Funds    7.56 % 

Gavin Baiera    16.91 %

Gregory Blank     9.54 %

Scott McCarty    10.70 % 


Dividend Policy
TVPT expects that its first dividend will be paid in the fourth quarter of 2014 (in respect of the third quarter of 2014) and will be $0.075 per share of its common stock. TVPT intends to fund its initial dividend, as well as any future dividends, from distributions made by its operating subsidiaries from their available cash generated from operations.

On an annualized basis that's $.30 or 2% on an annualized basis.

Use of proceeds
TVPT intends to use the $417 million in proceeds from its IPO as follows:

to reduce its outstanding indebtedness and liabilities of approximately $16 million resulting from the accelerated vesting of employee restricted stock units.

Specifically, TVPT intends to use approximately $401 million of the net proceeds from this offering to reduce outstanding indebtedness under its bridge loan agreement that may be refinanced on November 13, 2014 or extended on such date in accordance with its terms and maturity in 2022 and which bears interest at a floating rate, which can be either based on LIBOR plus 5.75%, with a LIBOR floor of 1% or at its option, base rate as defined within the bridge loan agreement plus 4.75%.


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