Sabre Corp Form 8-K Summary
Business Context and Reporting Period
Date: May 14, 2015
Company: Sabre Corporation
Event: Entry into a Material Definitive Agreement (Item 1.01) to acquire remaining shares of Abacus International Pte Ltd.
Sabre's wholly-owned subsidiary, Sabre Technology Enterprises II Ltd., entered into a Share Purchase Agreement to purchase all outstanding shares of Abacus International Pte Ltd ("Abacus") from Abacus International Holdings Ltd. Sabre currently owns approximately 35% of Abacus. Upon closing, Abacus will become an indirect, wholly-owned subsidiary of Sabre. Abacus is a Singapore-based business-to-business travel e-commerce provider serving the Asia-Pacific region.
Key Financial Metrics and Transaction Details
Purchase Price Structure: The aggregate purchase price is payable in cash at closing and equals 65% of the sum of:
- US$632 million; plus
- Abacus and its subsidiaries' actual cash and cash equivalents net of indebtedness.
Adjustments: The purchase price is subject to a net working capital adjustment.
Funding Sources: Sabre expects to fund the acquisition using:
- $250 million of cash on hand;
- Draws on its revolving credit facility;
- Debt financing.
Total Capital Requirement: Sabre expects the acquisition of Abacus and related national marketing companies will require approximately $500 million in funds, including advisory and financing costs.
Financial Performance: This filing does not provide specific revenue, profit, cash flow, margin, or debt metrics for Sabre or Abacus.
Material Changes and Strategic Impact
Ownership Change: Sabre will increase its ownership of Abacus from approximately 35% to 100%.
Related Acquisitions: The transaction includes separate non-competition and non-solicitation undertakings from owner carriers. Additionally, Sabre expects Abacus to acquire all or a controlling interest in certain national marketing companies in the Asia-Pacific region, which currently hold minority interests in these entities. These related acquisitions are expected to close concurrently with the main transaction.
Distribution Agreements: The acquisition includes new long-term distribution agreements between Abacus and owner carriers, effective upon closing.
Guidance, Outlook, and Risks
Closing Timeline: The acquisition is expected to close during the third quarter of 2015.
Conditions to Closing: The transaction is subject to regulatory approvals and the satisfaction of customary closing conditions. It is not conditioned on the receipt of financing.
Risk Factors: The filing includes standard forward-looking statement disclaimers. Actual results may differ due to risks described in Sabre's Annual Report on Form 10-K for the year ended December 31, 2014. Specific risks include the failure to obtain regulatory approvals and the uncertainty of closing conditions.
Liability Limitations: Seller's liability for breaches of representations and warranties is limited to title and authority. Breaches of certain operational representations are expected to be insured.
Investor Verification Checklist
- Verify the final purchase price calculation based on Abacus's actual cash, cash equivalents, and indebtedness at closing.
- Confirm the receipt of necessary regulatory approvals for the third-quarter 2015 closing.
- Review the terms of the new long-term distribution agreements with owner carriers.
- Assess the impact of the approximately $500 million total funding requirement on Sabre's liquidity and debt covenants.
- Monitor the status of the concurrent acquisitions of national marketing companies in the Asia-Pacific region.