Cinven raises further €306.6 million from the sale of a further 5% of its stake in Amadeus IT Holding, S.A.
European private equity firm Cinven today announces that it has successfully completed the sale of a further 22.4 million shares in Amadeus IT Holding, S.A. (“Amadeus”), a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry, at a price of €13.70 per share, realising €306.6 million of gross proceeds for the Third Cinven Fund. Following this placing, Cinven will have realised over €1 billion in proceeds from its investment, returning 4.9x its original investment to the fund over the lifetime of the investment (including the re-financing in 2007), whilst retaining an on-going 8% holding in Amadeus.
Cinven originated this investment through its Business Services sector team in 2002, leading to a public-to-private transaction in 2005 valuing the business at €4.4 billion. BC Partners and three airline shareholders - Air France, Lufthansa and Iberia - co-invested with Cinven. Despite a challenging market environment, the company’s IPO on the Madrid Stock Exchange launched on 29 April 2010 at a price of €11 per share raised a total of €1.44 billion.
Amadeus underwent a significant transformation while in private ownership and connects over 103,000 travel agencies, upwards of 720 airlines and more than 85,000 hotels and has increased its global market share by 8% to 37%. Its innovative IT solutions business, originally a small contributor to the group, has grown to be the leader in the passenger service solutions market, with a 28% share of revenues by 2009. During the period of private ownership, over €1 billion was invested in product development. This huge commitment drove the 48% revenue and 84% EBITDA growth that Amadeus experienced over the six years between 2004 and 2010.
Following its listing in April 2010, Amadeus has reported further significant progress with adjusted EBITDA increasing to €1,015 million (1) for the year ended 31 December 2010 from €889 million (2) in the prior year. In 2010, Amadeus again generated strong cash flows and continued to reduce covenanted leverage to 2.5 times EBITDA as at 31 December 2010, from 3.5 times EBITDA at the end of the prior year.
Cinven has agreed an additional lock-up period of 90 days with BC Partners, Air France, Lufthansa and Iberia.
Commenting on the transaction Stuart McAlpine of Cinven said:
“Amadeus is a business that continues to perform well both for our investors and for the broader market, showing an increase in value of 25% since listing in April 2010.
Strong origination is a key feature of Cinven’s investment strategy, one that has produced top-quartile returns for our investors over the past 30 years.”
(1) 2009 figures calculated as if IFRIC 18 would have been applied during the period. Non-audited figures
(2) Adjusted for extraordinary IPO costs (€325.6 million in 2010)