American Express GBT announced Monday it has entered into a definitive agreement to acquire global business travel and meetings solutions provider CWT in a deal some investors believe could foreshadow more mergers and acquisitions in the sector.

The acquisition, valued at approximately $570 million and still subject to purchase price adjustments and other qualifiers, is expected to close in the second half of the year and is subject to regulatory approvals and other closing conditions.

“This transaction is a unique opportunity to significantly grow our business,” Amex GBT CEO Paul Abbott said in a call with investors early Monday. “We will welcome 4,000 new customers to the proven Amex GBT software and services model, create more choice for customers and more opportunities for our people.”

The transaction will be funded by a combination of stock and cash, Abbott said. CWT is expected to generate approximately $850 million of revenues and between $70 million and $80 million of adjusted EBITDA in 2024.

After the acquisition closes, CWT customers would have access to Amex GBT’s proprietary software and services for travel and expense.

“Joining forces with Amex GBT helps accelerate our vision of a tech-enabled future for business travel, where people and technology combine to deliver an exceptional customer experience,” CWT CEO Patrick Andersen said in a statement. “We are highly confident in the value creation of the combined company.”

Investment banker Morgann Lesné, an expert in travel technology mergers and acquisitions with Cambon Partners, admired the move.

“Business travel is more than any other market a volume play: for the customers, for the suppliers. Size is the only way to make economies of scale and get to relevant levels of profitability,” Lesné said. “The acquisition of CWT by Amex GBT will put increasing pressure on the likes of Travelperk and Navan, both of which will have to fight even harder to get to that level of scale that a giant like Amex GBT-CWT is about to become.”

Lesné went on to say the deal is further proof that the year could turn out to be the biggest ever for M&A activity in the travel technology space.

“A wave of inevitable consolidation following COVID needs to take place whilst at the same time high interest rates have stalled start-up fundraising, leading to people having to merge or face closing,” he said. “Meanwhile record tourism figures for 2023 and a very positive outlook for 2024 are leaving many players feeling confident that now is the right time to acquire competitors.”

During his call with investors, Abbott spoke of the value CWT brings to AmexGBT.

“CWT’s vision of a tech-enabled future for business travel is aligned with our software and services model,” Abbott said, praising CWT’s digital products and its “immense potential” in using generative artificial intelligence across its products and services.

“Through the integration of CWT, we will grow our footprint in high-value industry verticals, expand our professional services business and bring more customers onto our software solutions to further differentiate our business and add significant value.”

Just last month, Amex GBT announced it had created a program to focus on AI projects and boost innovation and efficiency for the corporate travel management community.

The New York City-based multinational corporate travel management company became a public company in December 2021 with an expected market capitalization of $5.3 billion.

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