American Express Global Business Travel has announced its entry into a business combination agreement with special purpose acquisition company Apollo Strategic Growth Capital.
The combination is expected to create the world’s largest publicly traded B2B travel platform, which plans to list on the New York Stock Exchange under the new ticker symbol “GBTG”.
Becoming a public company positions GBT to "accelerate its existing growth strategy, while providing additional investment capacity and flexibility to create more value and choice for customers," read a news release on Friday (Dec. 3)
Communications platform company Zoom Video Communications; global travel technology company Sabre; APSG’s sponsor, an affiliate of alternative asset manager Apollo; funds managed by the private equity group of Ares Management Corporation; and investment adviser HG Vora, are among a new group of strategic and institutional investors committed to joining GBT’s upsized, oversubscribed PIPE. Upon the closing of the transaction, these companies will join American Express Company, Expedia Group, and Certares, a travel investment specialist, as shareholders.
“Becoming a public company will be a historic milestone on GBT’s growth journey," said Paul Abbott, GBT’s Chief Executive Officer. "Commitments from new investors like Zoom, Sabre, Apollo, Ares and HG Vora are a huge vote of confidence in our business and the future of business travel, and meetings and events. We expect that becoming a listed company will give us the additional investment capacity to strengthen our commitment to providing unrivaled value, choice and experiences to our customers and partners.”
Under an 11-year agreement to take effect upon closure of the transaction, GBT will continue to have the right to use the American Express trademark in connection with the American Express Global Business Travel and American Express GBT Meetings & Events brands.
GBT investment highlights
- Global leader in a $1.4 trillion industry with significant runway for growth
- Leading B2B travel platform, with strong brand and strategic shareholders
- Unique model with strong value proposition to customers and suppliers enabled by cutting-edge technology
- Multiple avenues to accelerate growth and create value
- Well-positioned for recovery in the large and resilient travel sector
- Proven value creation through M&A and operational expertise
- Strong financial performance, with proven track record of growth and profitability
The transaction implies a pro forma market capitalization of approximately $5.3 billion and a pro forma enterprise valuation of approximately $5 billion for GBT (assuming no redemptions by APSG’s shareholders).
In addition, GBT has obtained commitments for an additional $1 billion term loan facility to be established under its existing credit agreement to repay approximately $600 million of certain existing term loan facilities and to provide an incremental $400 million of financing for general corporate purposes, including to backstop potential redemptions.
Both GBT and APSG boards of directors have approved the proposed transaction, which is expected to be completed in the first half of 2022 subject to the satisfaction of customary closing conditions, including approval of the business combination by APSG’s shareholders and certain regulatory approvals.
Upon the closing of the transaction, the combined company will be renamed Global Business Travel Group, Inc. and will continue to conduct its day-to-day business under its existing name and brand American Express Global Business Travel.