Distribution Strategies

Orbitz Worldwide has announced equity investments totalling $100 million from PAR Investment Partners and Blackstone-controlled Travelport.

Published: 06 Nov 2009

Orbitz Worldwide has announced equity investments totalling $100 million from PAR Investment Partners and Blackstone-controlled Travelport.

PAR will exchange $49.68 million of Orbitz Worldwide senior term debt for 8.16 million shares of Orbitz Worldwide common stock.

Travelport will purchase 9.025 million shares of newly-issued Orbitz Worldwide common stock for $5.54 per share.

Blackstone and its controlled affiliates, which include Travelport, currently own 55 percent of the company's common stock. After this investment, taking into account the dilution arising from the transactions, Blackstone and its affiliates are expected to own 54.5 percent of the company's outstanding common stock. The funds received from Travelport are expected to be used for general corporate purposes, which could include additional investments and debt repayments.

“These transactions will enable us to reduce our debt by $50 million, increase our cash by $50 million, and give us additional operating flexibility as we pursue the global hotel distribution opportunity,” said Barney Harford, president & CEO, Orbitz Worldwide.

The transactions are expected to close in January 2010 upon receipt of shareholder approval.

Under the terms of the agreements, PAR will be granted the right to name one director and Travelport will be granted the right to name one additional director to the Orbitz Worldwide Board of Directors. These additions will increase the total number of directors from eight to ten.