Private-Equity Groups Buying Travelocity Parent Sabre for $4.5 Billion

DALLAS – Travel-reservations system operator Sabre Holdings (TSG), parent of the online service Travelocity.com, said Tuesday it is being acquired by private-equity groups for about $4.5 billion.

Silver Lake Partners and Texas Pacific Group said they will pay $32.75 per share in cash for the company, which connects airline, hotel and car-rental systems with travel agents. They also assume about $550 million in debt.

The price per share is a 30 percent premium over Sabre's average closing price over the past 60 days, the companies said. The deal would require approval by Sabre shareholders and is expected to close next spring.

Shares of Sabre rose $1.32, or 4.3 percent, to $31.75 in morning trading on the New York Stock Exchange.

The buyers said they have equity and debt commitments lined up for the full sale amount.

Greg Mondre, a managing director of Silver Lake Partners, said Sabre had delivered leading technology for the global travel industry.

"We are excited by the opportunity to invest in Sabre given its leadership position in travel technology and distribution and the strength of Travelocity and its other leading online brands," said Karl Peterson, a partner in Texas Pacific Group. He said the buyers would help Sabre build on a strong franchise.

Sabre Holdings said it doesn't expect to make management changes and will remain based in the Fort Worth suburb of Southlake.

Sabre's board of directors recommended that shareholders approve the sale. Chairman and Chief Executive Sam Gilliland said the deal was a good value for shareholders.

Sabre had hired Goldman, Sachs & Co. (GS) and Morgan Stanley (MS) as financial advisers. The buyers hired Deutsche Bank and Merrill Lynch (MER) to advise them and provide financing.

The company started as the reservations arm of American Airlines in the 1960s but now serves many major carriers.

In recent days, published reports said two rival groups of private-equity firms were bidding for Sabre, with Apollo Group leading the other group.

The sale of Sabre to private owners follow a deal last week in which Sabre rival Worldspan was sold to online travel planner Travelport for $1.4 billion. Travelport in turn is owned by The Blackstone Group LP.

Sabre and others who operate travel-reservations systems for travel agents face growing competition from Internet sites that sell travel tickets directly to consumers.

Sabre has about 9,000 employees and 2005 sales of $2.52 billion.

Silver Lake's other investments include Ameritrade, NASDAQ, SunGard Data Systems and research firms Gartner, Instinet and Thomson.

Texas Pacific Group has more than $30 billion of assets under management and has invested in industries including airlines, fast food, retail and technology.