Sabre sells hospitality unit to TPG for $1.1 billion

SOUTHLAKE, Texas - Sabre Corporation (NASDAQ: SABR), a leading technology provider to the global travel industry with annual revenue of $3.03 billion, has entered into a definitive agreement to sell its Hospitality Solutions business to TPG, a global alternative asset management firm, for $1.1 billion in cash. According to InvestingPro analysis, the company currently appears fairly valued, with impressive gross profit margins of 59%. The transaction, announced today, will see TPG invest through its private equity platform, TPG Capital.

The sale will transform Hospitality Solutions into an independent company, focusing on its SaaS platform used by over 40% of the world’s top hotel brands for reservation and guest information management. This move is part of Sabre’s strategy to pay down debt and concentrate on its core airline IT and travel marketplace platforms. The net proceeds of approximately $960 million will primarily be used for debt reduction, which is crucial given the company’s current total debt of $5.14 billion. InvestingPro data reveals this significant debt burden as one of several key metrics available to subscribers.

Sabre’s President and CEO, Kurt Ekert, remarked on the divestiture as evidence of the significant transformation within Hospitality Solutions and a step towards reinforcing the company’s capital allocation framework and enhancing shareholder value.

TPG Partner Tim Millikin highlighted the potential for growth and operational focus that the investment will bring to Hospitality Solutions, emphasizing the platform’s centrality to customer operations in delivering guest experiences.

The transaction is set to close by the end of the third quarter of 2025, pending customary closing conditions and regulatory approvals, and is not contingent on financing conditions. Sabre will also enter into a transition services agreement to assist with the transfer of the business post-closing.

Sabre and TPG have disclosed the terms of the transaction in a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.

Sabre will host a conference call on May 7, 2025, to discuss first-quarter financial results and details about the transaction. While the company isn’t currently profitable, analysts tracked by InvestingPro predict a return to profitability in 2025. For deeper insights into Sabre’s financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

This information is based on a press release statement.

In other recent news, Sabre Corporation reported several significant developments. BofA Securities upgraded Sabre’s stock rating from Neutral to Buy, increasing the price target to $6.10 from $4.50. This upgrade reflects a positive outlook on Sabre’s fiscal year 2025 guidance, supported by the company’s fourth-quarter results and anticipated revenue growth. Sabre also approved a new Omnibus Incentive Compensation Plan and elected ten directors to its board during its annual stockholders meeting. Ernst & Young LLP was ratified as the independent auditor for the fiscal year ending December 31, 2025. Additionally, Sabre extended its partnership with Preferred Hotels & Resorts, incorporating new solutions to enhance revenue streams and guest experiences. The company announced a collaboration with CellPoint Digital to enhance payment solutions for airlines, offering a broader range of payment methods. Furthermore, BermudAir has integrated Sabre’s Radixx system to support its expansion, focusing on reservation management and traveler experience. These developments highlight Sabre Corporation’s ongoing efforts to strengthen its position in the travel technology sector.

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