Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Sabre Rises in Debut After Smaller-Than-Planned IPO

April 17 (Bloomberg) -- Sabre Corp., the travel software and data company that operates the Travelocity website, gained in its trading debut after raising less than it planned in its initial public offering.

The shares rose 3.1 percent to $16.50 at the close in New York, after being priced at $16 each yesterday. The company, which says its technology processed more than $100 billion of estimated travel spending last year, sold 39.2 million shares after offering 44.7 million for $18 to $20 apiece.

Sabre, which has posted annual losses for at least the past five years, is going public as increased competition has led to lower fees and as long-term debt has swelled to more than $3 billion. In an effort turn things around, Sabre entered an agreement in August with Expedia Inc. to process bookings through that platform instead of Travelocity’s, which will cut revenue from that unit while also trimming costs.

“I believe this is part of Sabre’s focus on becoming a more profitable organization,” Ron Josey, an analyst at JMP Group Inc., who has the equivalent of a hold rating on Expedia, said by phone before the offering. “Expedia is powering the bookings, and it gives them a lot more data.”

Travelocity’s sales accounted for 19 percent of total revenue, according to the prospectus. Sabre plans to use the proceeds from the IPO to repay debt and a give a fee to its sponsors.

Travel Network

The offering marks a return to the public markets by Sabre after TPG Capital and Silver Lake Management LLC acquired it for about $5 billion, including debt, in 2006. TPG and Silver Lake didn’t plan to offer shares in the IPO, according to the prospectus, and will hold stakes of 37 and 23 percent, respectively, following the IPO.

Sabre’s business segments include a travel network, which enables booking transactions between airlines and travel agencies, and software for the air and hospitality industry. The company’s revenue, largely generated through fees, climbed 2.5 percent to $3 billion last year, the filing shows.

The Bloomberg Americas Software Index -- which includes 50 members such as Salesforce.com Inc. and Oracle Corp. -- declined 4.2 percent through yesterday since a 14-year high on April 1.

The shares are listed on the Nasdaq Stock Market under the symbol SABR. Morgan Stanley, Goldman Sachs Group Inc., Bank of America Corp. and Deutsche Bank managed the offering.

To contact the reporter on this story: Leslie Picker in New York at lpicker2@bloomberg.net

To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Elizabeth Wollman

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.