July 01, 2015
Amadeus to Acquire Navitaire from Accenture for US$830 Million; Amadeus and Accenture to Form Alliance to Focus on Digital Services for Airline Passengers
In Separate Agreement, Accenture to Provide Amadeus with Infrastructure Outsourcing, Application and R&D Services
Amadeus Says Complementary Acquisition Marks Significant Step in the Low-Cost and Hybrid-Carrier Airline Segments; Will Be Earnings-Accretive From Day One; Expected to Close in Q4 CY15, Subject to Customary Regulatory Approvals
NEW YORK and MADRID; July 1, 2015 – Amadeus has agreed to acquire Navitaire, a wholly owned subsidiary of Accenture (NYSE: ACN) that provides technology and business solutions to the airline industry, for US$830 million.
Navitaire, which focuses on the low-cost and hybrid-carrier segments of the airline industry and has a global customer base of more than 50 operators, provides revenue-generation and cost-streamlining solutions in the areas of reservations, ancillary sales, loyalty, revenue management, revenue accounting and business intelligence.
The addition of Navitaire’s portfolio of products and solutions for the low-cost segment will complement Amadeus’ Altéa suite of offerings for its largely full-service carrier customer base, giving the company the ability to serve a wider group of airlines. Amadeus intends to market and sell the two product portfolios separately and will continue to invest in both platforms, enhancing the services and functionality availability to all types of carriers. Amadeus believes that the acquisition will enable it to improve the connectivity between different carriers in the same airline groups or alliances and that the functionality from each platform will enhance the other.
“Bringing Navitaire’s experience, industry know-how, client base and strong product portfolio is a significant step for Amadeus in the low-cost and hybrid-carrier segments,” said Luis Maroto, President and CEO of Amadeus. “Airlines of all shapes and sizes face an increasingly competitive market for an increasingly demanding traveler, and this transaction will give us the ability to serve all airlines with technology that can enable them to drive new revenues and contain their costs.”
Navitaire has a strong track record of revenue growth, profitability and cash generation.
As part of the acquisition, approximately 550 Navitaire employees, including the company’s senior management team, are expected to transfer to Amadeus.
Amadeus and Accenture expect to close the Navitaire acquisition in the fourth quarter of calendar 2015, following regulatory approvals. Amadeus expects the acquisition to have minimal impact on its financial performance in 2015.
In a separate agreement, Accenture and Amadeus have agreed to form an alliance to help lead airlines through the digital transformation taking place in the industry and drive efficiency in the global operations of airlines’ businesses. The alliance combines Amadeus’ and Navitaire’s industry solutions and experience with Accenture’s aviation expertise and global capabilities in technology, analytics, cloud, mobility and operations. Accenture and Amadeus will jointly focus on digital travel services, with an emphasis on commercial passenger operations in order to provide a more seamless traveler experience from “door to door.”
Under the alliance agreement, Accenture will be designated as an Amadeus “Strategic Partner” for its Airline IT business for management consulting, technology consulting, systems integration, business process outsourcing and digital services, complementing Amadeus’ existing in-house consulting and digital services.
Accenture and Amadeus have also agreed to enter into a third agreement under which Accenture will provide Amadeus with infrastructure outsourcing, application and research and development services. Accenture will continue to provide hosting services for current Navitaire clients as well as Amadeus’s future clients that purchase the Navitaire solution.
“The travel industry is a strategic market for Accenture, and we continue to grow our practice in this area to help our clients better serve their digital customers,” said Eric Schaeffer, senior managing director, Accenture. “The combination of products and solutions from Accenture, Amadeus and Navitaire in this alliance will create a unique offering in the market that no single provider currently offers. We’re also excited to be leveraging our experience in the airline industry and our technology expertise to provide Amadeus with a range of outsourcing and R&D services.”
David P. Evans, Navitaire CEO, said, “Today’s announcement marks a new chapter for Navitaire that will enable us to accelerate and deepen our industry offerings. Our customers will benefit from greater access to Amadeus’ industry solutions to help support their growth and link with traditional industry partners. At the same time, they will continue to benefit from Accenture’s expertise and capabilities as a result of the Accenture-Amadeus alliance.”
Accenture is a global management consulting, technology services and outsourcing company, with more than 336,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com
Amadeus is a leading provider of advanced technology solutions for the global travel industry. Customer groups include travel providers (e.g. airlines, hotels, rail and ferry operators, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and travel management companies). The Amadeus group employs around 12,000 people worldwide, across central sites in Madrid (corporate headquarters), Nice (development) and Erding (operations), as well as 71 local Amadeus Commercial Organisations globally. The group operates a transaction-based business model. For the year ended December 31, 2014 the company reported revenues of €3,417.7 million and EBITDA of €1,306 million. Amadeus is listed on the Spanish Stock Exchange under the symbol "AMS.MC" and is a component of the IBEX 35 index.
To find out more about Amadeus, please visit www.amadeus.com, and www.amadeus.com/blog for more on the travel industry.
Navitaire (www.navitaire.com) delivers industry-leading technology services supporting growth, profitability and innovation to more than 50 airlines and rail companies worldwide, including many of the world’s most successful airlines. Navitaire offers a full suite of proven solutions focused on revenue generation and streamlining costs in the areas of reservations, ancillary sales, loyalty, revenue management, revenue accounting and business intelligence. A wholly owned subsidiary of Accenture, Navitaire has offices in North America, Europe, Asia and Australia.
Except for the historical information and discussions contained herein, statements in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. These include, without limitation, risks that: the company and Amadeus will not be able to close the transaction in the time period anticipated, or at all, which is dependent on the parties’ ability to satisfy certain closing conditions; the transaction might not achieve the anticipated benefits for the company; the company’s results of operations could be adversely affected by volatile, negative or uncertain economic conditions and the effects of these conditions on the company’s clients’ businesses and levels of business activity; the company’s business depends on generating and maintaining ongoing, profitable client demand for the company’s services and solutions, and a significant reduction in such demand could materially affect the company’s results of operations; if the company is unable to keep its supply of skills and resources in balance with client demand around the world and attract and retain professionals with strong leadership skills, the company’s business, the utilization rate of the company’s professionals and the company’s results of operations may be materially adversely affected; the markets in which the company competes are highly competitive, and the company might not be able to compete effectively; the company could have liability or the company’s reputation could be damaged if the company fails to protect client and/or company data or information systems as obligated by law or contract or if the company’s information systems are breached; the company’s results of operations and ability to grow could be materially negatively affected if the company cannot adapt and expand its services and solutions in response to ongoing changes in technology and offerings by new entrants; the company’s results of operations could materially suffer if the company is not able to obtain sufficient pricing to enable it to meet its profitability expectations; if the company does not accurately anticipate the cost, risk and complexity of performing its work or if the third parties upon whom it relies do not meet their commitments, then the company’s contracts could have delivery inefficiencies and be less profitable than expected or unprofitable; the company’s results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates; the company’s profitability could suffer if its cost-management strategies are unsuccessful, and the company may not be able to improve its profitability through improvements to cost-management to the degree it has done in the past; the company’s business could be materially adversely affected if the company incurs legal liability; the company’s work with government clients exposes the company to additional risks inherent in the government contracting environment; the company might not be successful at identifying, acquiring or integrating businesses or entering into joint ventures; the company’s Global Delivery Network is increasingly concentrated in India and the Philippines, which may expose it to operational risks; changes in the company’s level of taxes, as well as audits, investigations and tax proceedings, or changes in the company’s treatment as an Irish company, could have a material adverse effect on the company’s results of operations and financial condition; as a result of the company’s geographically diverse operations and its growth strategy to continue geographic expansion, the company is more susceptible to certain risks; adverse changes to the company’s relationships with key alliance partners or in the business of its key alliance partners could adversely affect the company’s results of operations; the company’s services or solutions could infringe upon the intellectual property rights of others or the company might lose its ability to utilize the intellectual property of others; if the company is unable to protect its intellectual property rights from unauthorized use or infringement by third parties, its business could be adversely affected; the company’s ability to attract and retain business and employees may depend on its reputation in the marketplace; many of the company’s contracts include payments that link some of its fees to the attainment of performance or business targets and/or require the company to meet specific service levels, which could increase the variability of the company’s revenues and impact its margins; if the company is unable to collect its receivables or unbilled services, the company’s results of operations, financial condition and cash flows could be adversely affected; if the company is unable to manage the organizational challenges associated with its size, the company might be unable to achieve its business objectives; the company’s share price and results of operations could fluctuate and be difficult to predict; the company’s results of operations and share price could be adversely affected if it is unable to maintain effective internal controls; any changes to the estimates and assumptions that the company makes in connection with the preparation of its consolidated financial statements could adversely affect its financial results; the company may be subject to criticism and negative publicity related to its incorporation in Ireland; as well as the risks, uncertainties and other factors discussed under the “Risk Factors” heading in Accenture plc’s most recent annual report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. Statements in this news release speak only as of the date they were made, and Accenture undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture’s expectations.
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