Hey, the airline business is rough, and with this acquisition Amadeus gets diversification, and a much bigger foothold into the hotel sector, particularly for groups and events. Companies such as Pegasus, Sabre, and Trust International could feel the competitive impact.
In one of the largest travel-related acquisitions of the year, Amadeus, which is known for its airline IT business and distribution services for travel agencies, accelerated its diversification into hotel technology by announcing its $500 million acquisition of Newmarket International.
Newmarket, based in Portsmouth, New Hampshire, offers cloud-based IT solutions for hotels’ groups and events businesses. With 430 employees globally, the entire team and management are slated to join Amadeus when the transaction closes in the first quarter of 2014.
In 2013, Newmarket had $110 million in estimated revenue, and notched an EBITDA margin of 31%.
Amadeus says the cash-rich business, which services 22,000 properties in 154 countries, will be accretive to Amadeus’ earnings immediately after the acquisition closes.
Amadeus plans on integrating Newmarket International’s cloud-based solutions into those currently offered by the Amadeus Global Hotel Group.
“This important and strategic acquisition will strengthen Amadeus’ position in the hotel IT sector, bringing important expertise and key customer relationships to the company that will accelerate our move into this key market,” said Luis Maroto, President and CEO of Amadeus. “With many hotel chains at a crossroads in their IT strategy, and the provider landscape fragmented, Amadeus is committed to playing a key role in partnering with the hotel industry to address its challenges and this transaction will greatly accelerate that objective.”
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