It is likely back to square one for Travelport, which has tried to sell its hottest commodity, payments provider eNett, for years. It's possible another buyer may emerge, but at a price far below the $1.7 billion deal that the parties struck in a now-vaporized bygone era.
Chalk up another blown-up travel-related acquisition deal to the coronavirus pandemic. In this one, Maine-based Wex Inc. informed the UK’s Travelport that it will not close on its $1.7 billion agreement to buy eNett and Optal, payment solutions providers, because the Covid-19 pandemic created a materially adverse effect.
Travelport, which controls eNett, and Optal shareholders, who own around a 25 percent stake in eNett, filed separate claims in the UK this week trying to force Wex to close on the deal. Wex informed Travelport May 4 that it didn’t intend to close on the deal.
Wex, a public company and payment solutions provider that trades on the New York Stock Exchange, announced in January that it would buy eNett and Optal. Optal shareholders have a minority stake in eNett; Travelport has no equity in Optal.
The claimants maintain that neither the coronavirus pandemic nor the bevy of travel restrictions that countries around the world have levied amount to a deal-busting material adverse effect, as defined in the merger agreement.
A March 7 statement from eNett, Travelport and Optal read, in part: “eNett, Travelport and Optal intend to vigorously enforce their contractual rights and to hold Wex to its promises under the purchase agreement. eNett, Travelport and Optal expect Wex to perform its contractual obligations, including to finalize its financing, obtain the remaining governmental approvals, and close the transaction.”
Wex didn’t immediately respond to a request for comment Tuesday.
eNett and Optal, which offers virtual payment cards, provide a variety of payment solutions throughout the travel industry.
Travelport has looked to sell eNett for several years because it was the fastest growing element of the global distribution system’s travel technology business. Selling eNett was high on the wish list of buyout firms Siris Capital and Ellliott Management when they took Travelport private in 2019.
If Wex succeeds in backing out of the deal, it will join a bevy of other failed acquisitions or investments, including American Express Global Business Travel-Carlyle Group; SoftBank-WeWork; and Boeing-Embraer. Sabre declined to close its deal to buy Farelogix, but regulatory opposition was the primary factor.
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Photo credit: Widely divergent payment methods around the world provide an opportunity for disruption. Wex informed Travelport that it wants to back out of its agreement to buy eNett and Optal. Grab