Southlake-based Sabre Corp. (NASDAQ: SABR), a travel technology provider, on Oct. 16 announced its acquisition of Radixx, an airline retailing software provider with an established presence in the low cost carrier (LCC) space. LCCs have grown twice as fast as full-service carriers over the past five years and now total nearly 30 percent of global passengers boarded annually.
Sabre purchased Radixx for approximately $110 million, including payments to debtholders, using cash on hand. Radixx is expected to generate approximately $20 million of revenue in 2019. The acquisition is expected to be accretive over the medium term, but modestly dilutive to Sabre's Adjusted EPS in 2020 due to expected incremental investment in the fast-growing LCC space. Sabre expects an immaterial impact to its full year 2019 results from the acquisition.
Sabre said the acquisition will help the company offer retailing, distribution and fulfillment capabilities to serve the LCC market. Radixx's signature products are a best-in-class LCC passenger service system (PSS) and internet booking engine (IBE).
Started in 1993, Orlando-based Radixx was built to leverage the technology industry's rapid advances with a focus on cloud-based airline solutions that can be deployed quickly. An established technology provider to low cost and retail-focused carriers, Radixx supports all airline business models with its industry leading travel e-commerce platform and boasts a high-quality and diverse customer base in key low cost carrier markets, including Europe, South America, Asia Pacific and Africa.
"By combining Radixx technology and expansive LCC customer base with Sabre's expertise, scale and global service capabilities, this acquisition will result in a better alternative for low cost carriers that might have otherwise felt their PSS and other technology options were limited," said Sean Menke, chief executive officer of Sabre. "This acquisition also allows Sabre to quickly expand its footprint both geographically and in terms of scope of service with an important and rapidly growing segment of the airline industry."
Sabre plans to operate Radixx as a standalone subsidiary through its Airline Solutions business.
Robert W. Baird & Co. acted as exclusive financial advisor to Radixx in the transaction.