Trading in shares of Hogg Robinson on the London Stock Exchange were suspended this morning as the acquisition of the company by Global Business Travel Holdings Limited (American Express GBT) was completed in a deal that values the travel management company at £410.6 million.
Shareholders are receiving 120p per share, at the top end of expectations. The share price was contingent on the sale of Fraedom to Visa taking place before the completion of the acquisition. Fraedom was sold for £143,038,776 on 7 March, more than the £141,750,000 anticipated when the acquisition was first mooted.
In the new set-up, HRG's chief operating officer Bill Brindle takes on the same role for American Express GBT while HRG CEO David Radcliffe joins the GBT board.
The company has also appointed Joanna Macleod, formerly American Express GBT's executive vide president for traveller care as chief transformation officer to facilitate the integration of the companies. Her team includes representatives of both companies.
Company spokesman Martin Ferguson said the team would be dedicated to the integration allowing others to get on with their day jobs.
The HRG brand is staying, at least for the time being.
"Brand will be just one of many things looked at as the integration plans are developed," said Ferguson. "At this stage, there is the vision (best of both companies — tech, people and footprint) but the opportunities are really just being sought out now."
At this share price, the deal is worth some £410.6 million, according to company's documents released at the time the planned acquisition was announced which represents a significant multiple of the company's 2017 net profits of some £22.3 million (net income at HRG has been around the £15 to £25 million mark for the past few years).
This suggests that either GBT has overpaid or that it sees significant growth potential for the business. The company, understandably, believes the latter.
Doug Anderson, chief executive officer of American Express GBT, said: "The combination of American Express GBT and HRG will provide clients and travellers with an unrivalled offering. I look forward to integrating our companies and combining the vast experience and expertise of both. We're proud to deliver enhanced value to all stakeholders."
Owners of other TMCs who are keen to sell out - and the industry gossip is that there are many — will be pleased that the market has given its view on what is considered a suitable multiple in the case of an acquisition.