Skift Take

Is Thoma Bravo overpaying for TravelClick? It is a legitimate question considering that the initial sale process gave way to an auction, and we hear other suitors were rolling their eyes at an $800 million price tag. And does transitioning from the grip of one private equity firm to another really put TravelClick in a stronger competitive position?

Private equity firm Thoma Bravo entered into an agreement to acquire TravelClick from Genstar Capital for $930 million following an auction.

“The acquisition of TravelClick is consistent with Thoma Bravo’s strategy of investing in market-leading companies with significant recurring revenue streams,” said Holden Spaht, managing partner at Thoma Bravo.

Thoma Bravo specializes in “consolidation investing in partnership with management,” and TravelClick is its anchor investment in the digital hospitality space.

If Thoma Bravo’s initial hospitality industry investment, in TravelClick, parallels what it has done in other industries, then it can be expected that Thoma Bravo would be looking to acquire other companies in the space and complementary pieces, as well, with the aim of generating higher performance through economies of scale.

The transaction is expected to close in the second quarter, and it is believed that top management at TravelClick will be staying on.

Spaht said he looks forward to working with the TravelClick team, including CEO “Larry Kutscher, to continue building on TravelClick’s position as the largest pure play provider of revenue enhancing technology to the hotel industry.”

TravelClick offers hotels cloud-based revenue-generation tools, and is also a hotel reservations system provider, competing with the likes of Sabre’s SynXis and others.

The $930 million price tag for TravelClick is a little more than three times TravelClick’s 2013 revenue.

It was clear that Genstar, which acquired TravelClick in 2007, didn’t have the resolve to try to take it to the next level while its private equity successor, Thoma Bravo, has bigger plans for its anchor investment in hospitality.

TravelClick says it has 37,000 hotel clients around the world.


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Tags: hotels, private equity, sabre, travelclick

Photo credit: TravelClick provides business intelligence and technology services to hotels, including Loews Hotels and Resorts. Pictured is the lobby of the Loews Annapolis Hotel. Loews Hotels & Resorts

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