American Express GBT will go public via SPAC at $5.3B valuation

American Express Global Business Travel (GBT) will become a public company through a special purpose acquisition company (SPAC) deal with Apollo Strategic Growth Capital (APSG). 

With plans to trade under the ticker GBTG, the company is expected to have a market capitalization of $5.3 billion.

The transaction is expected to provide up to $1.2 billion of gross proceeds, of which $335 million is fully committed from new investors including Apollo, Sabre, Zoom Video Communications, private equity group Ares Management Corporation and investment adviser HG Vora. 

Upon the closing of the transaction, these companies will become shareholders of GBT, joining American Express Company, Expedia Group and Certares.

“Becoming a public company will be a historic milestone on GBT’s growth journey. 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,” says Paul Abbott, CEO of GBT.

“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.”

According to GBT’s investor presentation, prior to the pandemic, the company managed $39 billion in global business travel spending in 2019 - a 40% higher total transaction value than its next closest competitor that year, BCD Travel. 

Revenue in 2019 was $2.8 billion and adjusted EBITDA was $502 million. And, thanks in part to $235 million in cost reductions the company has implemented since early 2020, it says it can return to that adjusted EBITDA level if its business returns to just 70% of 2019 levels. 

GBT says nearly half, 48%, of its revenue comes from companies in the United States and 26% is from Europe, the Middle East and Africa. Three-quarters of its revenue comes from travel and 24% from product and professional services. The company notes that “no single customer or supplier accounts for greater than 6% of total revenues.”

Among its 19,000 customers, GBT says it has 40 companies on BTN’s Corporate Travel 100 list, five of the 10 largest U.S. banks, five of the 10 largest health care companies and three of the four “Big Four” accounting firms. 

The company says it is “positioned for significant growth in the high-value SME segment,” in part due to its acquisition of Egencia from Expedia Group, which closed in early November and doubles GBT’s roster of small- and medium-size enterprises. 

GBT estimates total travel spend by SMEs was $270 billion in 2019 but only 30% of that was “managed” – creating a significant growth opportunity. 

Both GBT and APSG boards of directors have approved the proposed transaction, which is expected to be completed in the first half of 2022. 

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.

In a separate announcement today, Sabre and GBT say they will work together to develop technology over the next 10 years focused on solutions that “will enable the future of corporate travel distribution.” As part of the partnership, GBT will make a “multi-million dollar, long term annual investment” in the effort.

“As industry thought leaders, GBT and Sabre will define the future by developing distribution software and capabilities that provide our customers and supplier partners with the value, choice and experiences they expect,” Abbott says.

“Combining Sabre’s retailing and content aggregation capabilities and GBT’s corporate customer software and world class customer service, will enable us to deliver the business travel experiences corporate travelers want.”