Amex GBT Signs Deal to Buy CWT

Dark/Light Mode (26/03/24)  American Express Global Business Travel, operated by Global Business Travel Group and more commonly known as Amex GBT, has entered into a definitive agreement to acquire CWT, a global business travel and meetings solutions provider, in a transaction that values the company at approximately US$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.

CWT - a private company owned through funds managed by a group of financial institutions including Barings, MacKay Shields, and Monarch Alternative Capital - serves 4,000 customers and is expected to generate approximately $850 million of revenues and $70–$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.

Amex GBT expects its acquisition of CWT to be completed in H2 2024

After the acquisition closes, CWT customers will 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 technology partners.

Customers will also have access CWT's portfolio of services, including meetings and events, consulting and sustainability solutions.

“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,” said Patrick Andersen, CWT's CEO. “We are highly confident in the value creation of the combined company.”

At the closing of the transaction Amex GBT expects to issue approximately 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 CWT shareholders, which are primarily investment funds, are subject to a 90-day lockup for 50% of their shares and a 270-day lockup for the remainder of their shares.

Both companies’ boards of directors have approved the transaction, which is expected to be completed in the second half of 2024, subject to the satisfaction of customary closing conditions, including the receipt of certain regulatory approvals.

“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 Amex GBT - CWT is about to become,” said Investment banker Morgann Lesné, an expert in travel technology M&A from Cambon Partners. “More generally the deal is yet further proof that 2024 will turn out to be the biggest ever year for M&A in the travel technology space. A wave of inevitable consolidation following COVID needs to take place whilst at the same time high interest rates have stalled start-up fundraising, leading to people having to merge or face closing. Meanwhile record tourism figures for 2023 and a very positive outlook for 2024 are leaving many players feeling confident that now is the right time to acquire competitors.”

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