Sources: Sabre Selling Travelocity Business, Eyeing IPO

A Sabre press official declined to comment on information from multiple sources indicating Sabre is working to sell Travelocity Business as it prepares for a public offering later this year.

The unverified information from sources familiar with Sabre included reference to a possible announcement of the TBiz deal as soon as this week and filing of the IPO by the third quarter. It is not clear whether potential buyers for TBiz include industry companies, outside investors or both.

Silver Lake Partners and Texas Pacific Group in 2007 took Sabre Holdings private at a $5 billion valuation. The company has since experienced few management changes.

It may be that executives expect the US Airways litigation to be behind the company by the third quarter. Hopes for an IPO also could indicate they feel positively about negotiations with Delta and United, whose full-content deals were set to expire this year.

When asked, chairman and CEO Sam Gilliland has left open the door for an initial public offering, but also generally has denied any plans to spin off Travelocity.

Travelocity Business is a different beast. Some analysts believe the corporate travel agency is beneficial to Travelocity and Sabre in that it provides some leverage in dealing with airlines and other suppliers. As the thinking goes, suppliers are more reluctant to drag business customers into the middle of their bargaining over content than they are other consumers. But housing within Sabre a corporate travel agency that competes with the company's GDS customers also is not without its potential problems, as the company acknowledged in 2004. By 2005, TBiz was forced to back off from competing for accounts serviced by American Express, then the largest travel management company and a huge Sabre GDS user.

While it might be argued that TBiz has more opportunity outside of the mother's den, the TMC has landed a number of high-profile clients including the International Monetary Fund, Lockheed Martin and WellPoint.

"I have been through agency transitions before (Rosenbluth/American Express) and my take is this: good people, technology and ideas usually end up well-positioned through any type of sale or integration," according to Cindy Heston, WellPoint manager of strategic sourcing for travel and events. "I believe that Travelocity Business has the intellectual capital to manage any change and that their culture, people and innovation should remain as a strength for any other agency or technology business that may decide to buy them."

Travelocity Business launched in 2003 and advertised low booking fees based on efficient e-fulfillment operations. TBiz supports online booking tool technology from Sabre's GetThere and also Concur Travel. The company dabbled in international expansion but ultimately partnered with Radius in 2008.