Navigant Buys Rival SatoTravel
NEW YORK (AP) _ Corporate travel management company Navigant International Inc. on Thursday agreed to pay $45 million in cash and stock for privately-held SatoTravel, creating the nation’s second-largest player in a highly-fragmented industry.
With the acquisition of Arlington, Va.-based Sato, which specializes in managing travel for government agencies, Navigant will grow by more than 40 percent in terms of revenues and the size of its work force.
The combined company’s annual ticket sales of about $4 billion puts it in second place behind American Express, which is nearly three times as large.
Navigant chairman and chief executive Edward Adams said the deal will give both companies increased leverage with airlines to negotiate better fares for their clients.
``The biggest benefit is the additional resources that we can bring to bear for our customers,″ Adams said.
Sato’s customers include the U.S. Navy, the Internal Revenue Service and aerospace giant Lockheed Martin Corp.
Sato’s 2,000 employees, many of whom work at call centers in Virginia, Washington and Minnesota, will boost the size of Navigant’s work force to 6,000, though that number will likely be reduced as a result of the merger.
``It’s premature at this point to try and peg a number of layoffs,″ Adams said.
Navigant, based in Englewood, Colo., will pay $27 million in cash and the rest in stock. Navigant said it will pay a $4.8 million bonus if Sato reaches certain sales targets. The deal is expected to close by the end of the week.
On Thursday, shares of Navigant were up 6 cents to close at $16.88 on the Nasdaq Stock Market.