Amadeus IT Holding S.A. starts trading on the Spanish stock exchanges on April 29, 2010 in a blockbuster $1.24 billion IPO. Let’s take a quick peek under the hood and kick the tires.
The Amadeus IPO’s price range is from €9.2 to €12.2 per share, and they hope to raise €910 million to repay company debt with the sale of just over 85 million shares. The IPO pricing values Amadeus at between €4.3 billion and €5.4 billion.
Amadeus was taken private in 2005 by Cinven and BC Partners in a $6bn deal, with the two private equity firms holding a 52.8% stake, and the rest owned by Air France (23.1%), and Lufthansa and Iberia each holding 11.6%.
Iberia is planning to hold on to its entire stake – for now. The remaining four stakeholders are making a combined secondary offering of 35 million shares via Amadelux Investments. Current and former Amadeus management put together are offering another 1.68 million shares.
Amadeus reported 2009 revenues of €2.46 billion – a slight drop from the €2.5 billion in 2008. The lower revenues from the global drop in airline passenger traffic last year was partially offset by Amadeus’ growing share of the airline IT solutions market (28% in 2009). Amadeus is also expanding its IT offerings to include railway and hotel management systems.
Their share of the Global Distributions Systems (GDS) market is now 39%. Via Opodo, Amadeus also has a presence in the online travel agency business. But its not a significant factor – as yet, since their Distribution and IT Solutions accounted for 96% of all revenue in 2009.
If you need more facts and figures about the past, present and future of the GDS business, read the PhoCusWright report on The Role and Value of the Global Distribution Systems in Travel Distribution (free download, registration required).
A question that must be on the minds of many investors – Is it possible that Amadeus might end up like Blackstone’s botched bid to take Travelport public?
At this stage, the biggest worry for Amadeus managers and their bankers is the volcanic ash cloud induced airline shutdown and its impact on the European markets, airline stocks and Amadeus’ bottomline.
Stocks of European airlines have taken a beating in the last few days, and apart from that, the IATA estimates a global loss of $200 million per day for the airline industry.
By the 25th of April, if European airspace is still under lockdown, investors will find it hard to disassociate Amadeus from the airline chaos. But if the skies clear up by the 20th or 21st of April and a whole week goes by with planes in the air as usual, Amadeus has no reason not to expect a successful IPO.
Update 1: April 28, 2010 - Amadeus Sets IPO final price at EUR11 a share, which values Amadeus at EUR 4.93 billion. Shares start trading on Thursday. Expect the price to jump to above EUR 15 by early next week, and rise to just below EUR 20 within a month.
Update 2: April 29, 2010 - Shares of Amadeus IT Holding SA (AMS.MC) opened high and as of now, AMS is up 8.18% to EUR 11.90.
Stay tuned for more updates leading upto and immediately after April 29.