All investments

Amadeus

Activity
Global travel transaction processor and provider of advanced technology solutions
Transaction value
€4,400 million
Acquired
Jun 2005
Realised
Nov 2011
Sector
Business Services

Business
Amadeus comprises two businesses:

  • Distribution: an international network for the distribution of travel products and services, powered by the company's Global Distribution System (GDS);
  • and IT Solutions (Altéa): an extensive range of technology solutions for vital business processes, such as reservations and departure control made available to travel providers (mainly airlines).

Before its acquisition by Cinven, Amadeus was listed on the Madrid, Paris and Frankfurt stock exchanges and had three major European airline shareholders: Air France, Lufthansa and Iberia. All three reinvested alongside Cinven in 2005.

Strategy
Amadeus was transformed after it was taken private in 2005: it connected over 103,000 travel agencies, upwards of 720 airlines and more than 85,000 hotels and increased its global market share by 8% to 38%. Its innovative IT solutions business grew to be the leader in the passenger service solutions market, with a 28% share of revenues by 2009 (negligible in 2005).

During Cinven's ownership, we invested over €1 billion in product development, which drove the 48% revenue growth that Amadeus experienced over the seven years between 2004 and 2010. Increased efficiency led to an 84% growth in EBITDA.

Following the appointment of new management, Opodo, the online travel agent owned by Amadeus at the time of Cinven's acquisition, underwent a major turnaround. In February 2011, Opodo was sold successfully for €449m representing an EBITDA multiple of 11.7x. The proceeds were used to de-lever the balance sheet.

Amadeus generated strong cash flows enabling a reduction in the net debt that allowed a dividend recapitalisation in May 2007. It continued to reduce its net debt to EBITDA ratio from 5.4 in June 2007, shortly after the refinancing, to 1.8 x four years later In May 2011, Amadeus completed a refinancing of its debt, putting in place an investment grade facility to support its next phase of development.

Outcome
Amadeus achieved outstanding results following its acquisition in 2005. 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 €1.44bn.

Cinven generated €223 million when it sold its original stake in Amadeus at the time of the company's listing. It subsequently sold its remaining shares in four separate tranches during the period October 2010 to November 2011, on each occasion at a share price significantly higher than the €11 per share when the company floated.

Overall, Cinven generated 7 times its original investment in Amadeus for the Third Cinven Fund, realising gross proceeds of more than €1.6 billion.