Travelport, which went public in 2014, said on Thursday in a financial filing in the US that one of its New York-based shareholders, Angelo, Gordon & Co will be selling 7,986,979 shares in the company, collectively owned across several funds.
In brief, Angelo, Gordon is cashing out.
Back in 2014, after its initial public offering, its funds owned 12% of Travelport. But last March, Angelo, Gordon announced the sale of 10 million of its shares, an offering that came only four months after the firm having sold about 4 million shares. If the latest sale goes according to plan, it will own no more shares in the company.
Update to its "growth strategies" statement
To encourage share-buying in each of these offerings, Travelport included a picture of its financial health in each filing with the US Securities & Exchange Commission.
Much of the "growth strategies" covered in the latest prospectus is copy-and-pasted from the November 2015 prospectus. But a few sections have been added, and the new wording may be noteworthy.
In November 2015, the company said it had "signed over 120 airlines" to its Rich Content and Branding solution. Now it says it currently has "approximately 170 airlines implemented" on the solution.
Speaking of Hotelzon, a B2B hotel distribution technology provider it acquired in 2014, Travelport added to its "growth strategies" boilerplate:
"The Hotelzon solution also works well when a corporate hotel booking is not an ‘add on’ to an air booking, which is particularly the case for travel within Continental Europe, where many business trips actually take place in the traveller’s home country or to bordering countries, and trains and cars are often the preferred method of transport rather than flights. Through Hotelzon’s technology, privately negotiated rates for corporations can be added and accessed directly by the corporation and its employees."
Travelport's "Growth Strategies" now includes a section devoted to car rental/hire
"Car: Our strategy is to continue to build on our extensive content offering for travel agency customers. In February 2016, we signed a new global agreement with Mobacar, a ground transportation distribution platform that offers content from both global and regional transport providers, which will provide Travelport-connected travel agencies with access to additional car rental options.
"Our travel agency customers will have access to more choice of car content, as well as the ability to search and book content from smaller regional car rental companies."
Also new is a section discussing the implications of its acquisition last year of Ireland-based company MTT, which it calls "the world’s leading provider of mobile apps development and digital services in the travel industry," and of Locomote, Australia-based corporate travel procurement and management platform.
"The demographic make-up of corporate travelers is changing rapidly, with many now preferring to self-serve and use their mobile devices rather than booking travel through more traditional methods. We intend to be at the forefront of these changes as we deploy our content and digital technology assets to address them.
"Recent investments to support the growth and changes we are seeing in the business travel sector include our acquisition of Hotelzon, a B2B hotel distribution technology provider focused on corporates, which has made booking independent hotels, and accessing privately negotiated corporate hotel rates, more efficient for business travelers.
"We also have a majority ownership in Locomote, an Australia-based corporate travel procurement and management platform focused on empowering corporate travelers through an improved mobile user experience. The Locomote platform provides solutions for all corporate travel management needs, including travel authorization and policy compliance, flexibility to change bookings, and more efficient back-office reconciliation....
"MTT’s clients already include many blue-chip brands in the industry and this acquisition formed a key part of our ongoing strategy to support the ever-connected business traveler.
We will continue to develop our offering in the business travel space and, as well as strengthening our partnerships with TMCs, we will look at new opportunities to invest in products that distribute travel technology solutions directly to corporations."
Lastly, Travelport shares some updated figures on some of the metrics it most likes to tout, such as “RevPas”, or revenue per passenger, which is computed by dividing global distribution system revenue by the total number of reported segments. The company says it has grown RevPas in each of the last 18 quarters, on a year-over-year basis, from $5.11 in the first quarter of 2011 to $6.61 in the second quarter of 2016.
Its "attachment rate" on airline tickets sold by agencies also continues to improve. It added 47 hospitality segments per 100 airline tickets issued, in millions -- a number that is up from 34 hospitality segments sold for every 100 air tickets sold in 2010. (The company defines "hospitality" as "hotel, car, rail and other non-air bookings.")
New balance of ownership
Given Travelport's closing stock price of slightly above $14 on Thursday, the latest secondary offering could possibly be worth as much as $100 million -- depending on conditions at the time of the transaction and if all the shares are sold.
Travelport's shares have ranged from a low of $8.50 on February 9, 2016 to a high of $18.30 on January 2, 2015. (For the latest TVPT share price, click here.)
The secondary sale may be neutral for Travelport, if the pattern holds from the previous offerings in the past year. Travelport will not gain any capital as a result of the sale. That said, as a matter of supply-and-demand logic, secondary offerings imply that companies must work even harder to increase return on equity, as profits need to rise more than shareholders' equity does.
Earlier: August 2016: Travelport sees revenue climb, highlights OTA benefits and ancillary evolution
June 2016: Travelport’s new CCO Shurrock discusses strategy