Amadeus buys Newmarket for $500m as it targets hospitality growth

GDS and travel technology provider Amadeus has bought cloud-based  hospitality event and IT specialist Newmarket International.

The deal for $500 million will accelerate Amadeus’ move into the accommodation sector which it has targeted as a key area for growth.

Luis Maroto, president and chief executive of Amadeus, said: “This important and strategic acquisition will strengthen Amadeus’ position in the hotel IT sector, bringing important expertise and key customer relationships to the company that will accelerate our move into this key market.

“With many hotel chains at a crossroads in their IT strategy, and the provider landscape fragmented, Amadeus is committed to playing a key role in partnering with the hotel industry to address its challenges and this transaction will greatly accelerate that objective.”

Jeff Hiscox, President and chief executive of Newmarket, added: “The acquisition by Amadeus is great news for both our customers and employees.

“We have built a profitable and successful business that is the undisputed leader in our market segment and by joining Amadeus we have the ideal platform to take that success to the next level and extend our leadership in hotel IT solutions”.   

“Amadeus continues to develop and provide IT systems for the Hotel industry based-on our successful cloud-based platform in use in the Airline IT segment of the market. 

Jeff Edwards, head of global hotels group at Amadeus, said: “We intend to leverage the Newmarket business and proven execution abilities to expand the Amadeus Hotel offering to hotels worldwide.

“The combination of Newmarket’s expertise and exceptional customer service, with Amadeus’ scale and global reach will enable us to deliver a comprehensive set of integrated high value products and services to the hotel industry.”

Newmarket, which serves around 22,000 unique properties in 154 countries, operates in the group and event management segment of the hotel industry, which is estimated to account for 30-40% of a full-service hotel’s revenues.

It will be operated as a stand-alone business within Amadeus’ Global Hotel Group.   The combination of Amadeus and Newmarket is expected to result in revenue synergy opportunities in both Hotel IT and Distribution. 

As a result of the transaction approximately 430 employees globally, including Newmarket’s entire management team, will become part of the Amadeus Global Hotel Group, maintaining Newmarket’s headquarters location in Portsmouth, New Hampshire.

Amadeus and Newmarket expect to complete closing activities in the first quarter of 2014 and therefore do not expect the transaction to have any impact on Amadeus’ financial performance in 2013.

JP Morgan acted as financial advisors to Amadeus in this transaction.

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