ATLANTA -- Worldspan Technologies, which acquired Worldspan last
July, filed plans for an initial public stock offering with the
Securities and Exchange Commission.
According to the prospectus, Worldspan Technologies would trade
on the New York Stock Exchange under the symbol WS.
There was no indication how much stock would be sold or at what
price, but Worldspan said the net proceeds from the offering would
raise some $438.1 million to pay down debt and redeem outstanding
shares of preferred stock.
The company's two largest stockholders are Citigroup Venture
Capital Equity Partners, L.P, with 62%, and the Ontario Teachers'
Pension Plan Board, which holds 28%.
Worldspan CEO Rakesh Gangwal owns 4.2%, and other officers and
directors hold the remainder.
The prospectus indicated that the current owners might sell some
of their shares as part of the offering but did not offer details
on how much of their stakes might be reduced or diluted.
Repeated calls to Worldspan seeking clarification weren't
returned.
In laying out its business plan for prospective investors,
Worldspan cited its relative independence, its foothold in
crunching corporate online bookings for Expedia and Orbitz and
opportunities to increase market share among traditional agencies
in Europe, Latin America and South America.
The company said that from 1999 hrough 2003, it generated $946
million of net cash from operations, "which primarily enabled us to
distribute $715 million" to its previous airline owners during that
time period.
The prospectus also indicated that in 2003 Worldspan "processed
over 65% of online airline transactions made in the U.S. and
processed by a global distribution system, or GDS," and it has
plans to "improve our cost structure by streamlining our
programming and processing systems and reducing our network and
data center costs, among other initiatives."
But Richard Eastman, industry analyst and president of the
Eastman Group software firm, conjectured that debt-laden Worldspan
turned to an IPO to raise money because it "gambled on a financial
play that didn't work."
"Maybe a potential buyer backed out and Worldspan needed a way
out," Eastman said.
He also criticized Worldspan for not laying out any new strategy
in issuing the IPO.
"It looks like Worldspan is simply going to do more of the same
thing it has done in the past, in a world that is increasingly
abandoning centralized host switching, segment-fee transaction
processing and legacy technology platforms," Eastman said.
To contact reporter Michael Milligan, send e-mail to [email protected].