Travelport has agreed to sell payments business eNett to
rival brand WEX.
WEX is also simultaneously buying virtual card issuer Optal.
In total, WEX will pay $1.7 billion for the two companies.
Travelport’s decision to offload the eNett division comes
just nine months after the company came off the public financial markets and
went back into the hands of private equity.
WEX will pay $1.28 billion in cash and 2 million in common
shares. It is buying eNett from Travelport owners Siris Capital Group and Evergreen
Coast Capital Corp. and acquiring Optal from private shareholders.
Optal and eNett already had a significant partnership,
having signed an agreement in April 2015 for the virtual card issuer to be the
primary provider of virtual account numbers (VANs) worldwide.
eNett’s VANs allow travel agencies to generate a unique
16-digit Mastercard number used to pay travel suppliers with less risk, with a
new number used for each booking or payment transaction.
The payments business was often seen as jewel in the crown
in the Travelport portfolio, with sustained and healthy growth figures compared
to the distribution and technology divisions.
Formed in 2009 as a joint venture with PSP International,
73% of eNett’s ownership was eventually held by Travelport.
The last full-year results for Travelport had eNett coming
in with net revenue growth of 63% year-over-year to $315 million for 2018.
Travelport’s final quarterly earnings report before coming
off the public markets in May 2019 saw eNett post a 12% increase to $83 million
for first three months of the year.
A Travelport official said, “This is good news for Travelport
as we tighten our strategic focus and good news for eNett, which gains a new
owner that complements its capabilities.”
From a WEX perspective, buying the two companies gives it a “unique
but complementary product suite” and an ability to grow the company outside of
the United States, says chair and CEO Melissa Smith.
She adds: “We are confident this transaction will enable us
to accelerate our growth by deepening and expanding our position in the global
travel market, broadening our product offerings to more fully address the needs
of our travel customers, and diversifying our business geographically while
reducing our exposure to macro-economic factors.”
The sale of the two businesses is expected to be completed
in the middle of 2020.