Travelport - an eventual 0?
Does anyone follow Travelport here? Debt keeps trading down post LME. Is this one where terminal value of the business is 0? So long for value accretive transactions…
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Based on the most helpful WSO content, there isn't specific information available about Travelport or its financial situation, including its debt trading down post-LME or the potential terminal value of the business. If you're analyzing whether the terminal value could be zero, you might want to consider factors like the company's enterprise value, debt structure, and market conditions.
For a deeper dive, you could explore discussions on distressed debt, restructuring, or terminal value calculations in the WSO forums, as these topics are frequently covered and could provide insights relevant to your query.
Sources: Houlihan Tough Restructuring Question, DCF Analysis Urgent Help, Idea Generation... and Why Wall Street Sucks at It, Terminal Value Calculation in a DCF for a private company, Notes for Technical Interview Questions
What is your justification for believing 0 TV? I don’t follow TPORT specifically but 0 seems a bit far fetched. Just look at Amadeus trading at ~10x EBITDA. Think TPORT was even the first to integrate NDC but looks like they’ve just been crushed competitively by interest payments + potentially overaggressive PE owners.
Put another way, if you imagine all the debt was suddenly erased from the balance sheet, the business would probably look quite decent. The value of the equity is a different story though.. maybe a few more LME’s and it’ll be back in the green lol
Shrinking TAM shrinking market share a product that no longer needs to exist lead by a bunch of distressed people who think too highly of their own intelligence despite (lack of) actual performance
Ok again put aside the current cap structure (which is a mess).
So by your logic the TV of Amadeus and Saber should both be 0 too? What makes you believe the product “no longer needs to exist”. I would acknowledge direct distribution is probably the best unit economics once implemented for airlines but that doesn’t necessarily mean alternative channels shouldn’t exist.
They only have “value” with the travel agents which is increasingly being eaten up by AI. When a mkt shrinks enough and you need to invest in product / cac to stay alive you can’t really ignore cap stack bc they are the absolute laggard in being able to invest in the business. The investment is not really for growth but for defensive purposes - if you don’t invest melt faster
Not a zero, but this company has had cap structure issues for 20 years
Yes Travelport is a perpetual share loser. The people comparing it to Amadeus don’t really understand the industry. Both Travelport & Sabre are behind technology wise vs the disruptors / Amadeus. Lastly, the US airline industry is highly monopolistic (on a route basis) so there’s no good reason for GDS to exist which was not the case when they were created. Frankly, Sabre and Travelport were mismanaged under PE and their leverage made them unable to adapt.
This
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