Sabre Corp. has agreed to acquire Farelogix for $360 million. Executives of both companies said the deal will speed up their development of retailing, distribution and fulfillment capabilities enabled by the International Air Transportation Association's New Distribution Capability standards.
The acquisition, which the companies expect will close late this year or early next year pending regulatory approval, "allows us to bring together the best capabilities of Sabre and Farelogix," Sabre Travel Solutions president and EVP Dave Shirk said on a press conference call on Wednesday. Those benefits include "greater control and consistency of offers across channels" and "more personalization and more dynamic offers," he said. "It will help us drive much faster innovation in the highly competitive airline IT space, and not just growth but profitable growth."
Shirk called Farelogix the "most open solution in the marketplace," as it facilitates connections to all major global distribution systems as well as to non-GDS platforms. That will enable Sabre to broaden its reach, as most of its current options require use of Sabre's passenger services system and GDS, he said.
Farelogix CEO Jim Davidson said the acquisition adds necessary global scale. Farelogix has an employee base of about 225 people, which Sabre, an employer of about 10,000, plans to maintain. The two already have several mutual customers. "When you look at the footprint Sabre has, this was a logical and important step for us," Davidson said. "It's really the opportunity to take what we already learned as two separate companies and intensify that as a joined company."
Sabre and Farelogix have a rather contentious history. In 2009, for example, Farelogix was part of a U.S. Department of Justice investigation into alleged anticompetitive practices by Sabre after Sabre canceled a developer agreement with Farelogix. "And so the lion and the lamb lay down together," airline analyst Henry Harteveldt tweeted after the announcement. He added that the acquisition was an "excellent match."
With all that in the past, Shirk said the acquisition was part of a "renaissance" and "massive transformation" for Sabre, one that would "turbocharge the leadership position the companies have in NDC and offer and order management."