American Express Global Business Travel Inks SPAC Deal
AmEx Global Business Travel Valued at $5.3 Billion
Concerns about recovery in business travel are not stopping American Express Global Business Travel from going public via a SPAC deal. The company, which provides travel booking services to corporations, is 50% owned by American Express (AXP). It is merging with Apollo Strategic Growth Capital (APSG), an Apollo Global Management (APO) blank-check company.
The deal gives American Express Global Business Travel a valuation of about $5.3 billion. It is seen as a vote of confidence in the recovery in business travel. The merger comes as the business travel market has yet to recover from the pandemic. New variants of coronavirus including Omicron could threaten that further.
Carlyle Previously Walked Away
The deal is taking place several months after AmEx Global Business Travel’s plan to sell a 20% stake to Carlyle Group and GIC, a sovereign wealth fund in Singapore, fell through. The deal, which would have valued the company at around $5 billion, came undone once the pandemic hit.
Coming off that failed deal, the business travel company inked partnerships and made acquisitions to better position itself. Those deals included Egenica, a digital travel platform owned by Expedia (EXPE). As part of the transaction, Expedia became a customer of AmEx Global Business Travel. 30SecondsToFly and Ovation Travel are two other recent buys. The company also cut costs in reaction to plummeting sales during the pandemic.
AmEx Global Business Travel Raising $335 Million
As part of its SPAC deal, AmEx Global Business Travel is raising roughly $335 million from outside investors including Zoom Video Communications (ZM) Sabre (SABR), and Apollo Global Management. Proceeds from the deal could be used to bankroll growth. AmEx Global Business Travel has access to a $1 billion term loan as well. Some of that could be used to pay down debt and cover any costs related to the SPAC deal.
Recovery for the business travel market is still up in the air as Omicron reaches the US. AmEx Global Business Travel and Apollo Global Management don’t think the industry will be in trouble for too much longer. It remains to be seen if investors will agree.
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