American Express Global Business Travel (GBT) has announced its entry into a definitive business combination agreement with special purpose acquisition company Apollo Strategic Growth Capital (APSG). The combination is expected to create the world’s largest publicly traded B2B travel platform, which plans to list on the New York Stock Exchange (NYSE) under the new ticker symbol “GBTG.” The decision of going public will assist GBT in accelerating its existing growth strategy, while providing additional investment capacity and flexibility to create more value and choice for customers.
The new group of strategic and institutional investors set to join GBT’s upsized, oversubscribed PIPE include communications platform company Zoom Video Communications; global travel technology company Sabre; APSG’s sponsor, an affiliate of alternative asset manager Apollo; funds managed by the private equity group of Ares Management Corporation (Ares); and investment advisor HG Vora. Once the transaction is complete, the aforementioned companies will join American Express Company, Expedia Group and Certares as shareholders.
Under an 11-year agreement to take effect upon completion of the transaction, GBT will continue to have the right to use the American Express trademark in connection with the American Express Global Business Travel and American Express GBT Meetings & Events brands.
The transaction implies a pro forma market capitalization of $5.3 billion and a pro forma enterprise valuation of $5 billion for GBT (assuming no redemptions by APSG’s shareholders).
Current GBT common equity holders are expected to roll their existing equity holdings into the combined company. The transaction is expected to provide up to $1.2 billion in gross proceeds, comprised of APSG’s $817 million of cash held in trust and the upsized $335 million fully committed common stock PIPE financing. All references to transaction proceeds are subject to any redemptions by the public shareholders of APSG and payment of transaction expenses.
Additionally, GBT has obtained commitments for an additional $1 billion term loan facility to be established under its existing credit agreement to repay an estimated $600 million of certain existing term loan facilities and to provide an incremental $400 million of financing for general corporate purposes, including to backstop potential redemptions.
The boards of directors of GBT and APSG have approved the proposed transaction, which is likely to be completed in the first half of 2022 subject to the satisfaction of customary closing conditions, including approval of the business combination by APSG’s shareholders and certain regulatory approvals.
Upon the closing of the transaction, the combined company will be renamed Global Business Travel Group, Inc. and will continue to conduct its day-to-day business under its existing name and brand American Express Global Business Travel.
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