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Pandemic drives carlson family out of the business where they made a fortune.
The pandemic has pushed the billionaire Carlson family, one of the wealthiest in Minnesota, out of the business where they made their fortune.
Carlson Travel Inc. and 37 related companies tumbled into bankruptcy last month after they were no longer able to withstand the worldwide collapse of corporate travel caused by efforts to slow the spread of coronavirus.
As the firms restructured $1.6 billion in debt, members of the founding family traded their ownership interest in the firms for debt forgiveness.
"The companies are now owned by a group of financial institutions and bondholders," Julian Walker, a Carlson Travel spokesman said. The family members "have no skin in the game."
The outcome is another major turning point for the Carlson family, now led by Marilyn Carlson Nelson and Barbara Carlson Gage, daughters of Curt Carlson, who started the Gold Bond Stamp Co. in 1938 and then the Carlson hotel and travel companies in the 1960s.
Carlson Cos., with its then-portfolio of 1,400 hotels, was sold in 2016 to the Chinese conglomerate HNA Tourism Group. With the exit now from the travel entities, the family's assets are chiefly in other investments.
The restructuring does not involve Carlson Private Capital Partners, the family's private equity firm in Minnetonka.
Carlson Travel will maintain its headquarters at the company's campus at the intersection of Interstate 394 and Interstate 494 in Minnetonka.
The company, which makes money by booking business trips and meeting and event planning, said in court filings that it does not expect its business to return to pre-pandemic levels in the next three years.
"Though the COVID-19 pandemic adversely affected many industries, few industries were as radically affected as the travel industry," Carlson Travel CEO Michelle Frymire said in an affidavit filed in bankruptcy court. "Corporate travel and in-person events and conferences came to an abrupt halt nearly overnight."
Carlson Travel expects to lose $15 million on revenue of $701 million next year, a substantial downturn from 2019, when Carlson Travel earned $239 million on $1.5 billion in revenue, court records show.
In the United States, business travel revenue in 2021 is projected to remain more than $59 billion below 2019 revenues, according to a recent report from the American Hotel & Lodging Association, a trade group. In 2020, business travel fell $49 billion. Hotels have shed nearly 500,000 jobs in the last two years, according to the trade group.
Minnesota has seen one of the steepest declines, with business travel revenue expected to be 72% lower this year than it was in 2019. Only eight other states will see bigger drops, with Massachusetts leading the way at 85%.
The primary business of Carlson Travel is CWT, formerly Carlson Wagonlit Travel, a global travel services company that employs more than 12,000 people in 45 countries. In 2019, CWT was a leader in corporate travel, booking thousands of business trips daily for government agencies, corporate giants and small- and mid-sized businesses around the world.
On an average day before COVID-19, CWT managed about 100 meetings and events, communicated to 70,000 travelers and facilitated more than 240,000 transactions, bankruptcy records show. The company processed more than $23 billion in hotel bookings, airplane flights, car rentals and other corporate travel expenses in 2019.
When the pandemic hit and travel collapsed, Carlson Travel executives sought to reorganize the company's finances, bankruptcy records show.
The company slashed costs through furloughs and pay cuts in 33 countries, saving $500 million. Altogether, the company temporarily eliminated about 5,000 jobs. It also renegotiated key contracts and leases, suspended capital-intensive projects and curtailed nearly all incentive compensation programs. Those changes permanently reduced operating costs by about $300 million a year, records show.
This May, the company hired investment banker Houlihan Lokey to contact 50 potential buyers and gauge their interest in buying some or all of Carlson Travel's assets.
Those talks ended after just one bidder emerged with an informal offer that failed to gain the support of Carlson's bondholders. In a liquidation analysis filed in court, Carlson Travel and its affiliates were valued at $1.1 billion, but creditors were unlikely to get back more than $202 million in a sale, records show.
The company also obtained $125 million in new equity from its owners and borrowed $260 million. Executives thought those moves would be enough. But then, as travel started to recover this year, COVID-19 cases rose again.
"In the United States, where recovery was initially perceived to be strong, the recent surge in the Delta variant and nationwide delays in 'return to office' initiatives injected significant uncertainty'' into the domestic travel recovery, Frymire said in the affidavit.
The company sought Chapter 11 protection last month with a prepackaged reorganization plan, one that had approval from owners and lenders. The plan will eliminate about half of the company's $1.6 billion in debt and provide $350 million in new equity capital. Carlson Travel plans to spend a portion of that on a new technology platform.
The company asked the court to approve the plan 18 hours after filing the case in Texas, noting that a delay of just a few days could mean the loss of customers and revenue.
However, the U.S. Trustee in Texas asked for a delay, saying the company's "breakneck schedule" made it impossible for creditors to evaluate and react to 38 bankruptcy cases.
Despite the protest, a Texas bankruptcy judge approved Carlson's plan the same day the trustee filed its complaint without commenting on the objection.
"We are pleased to have received prompt court approval of the agreement we reached with CWT's financial stakeholders, which positions the company for long-term success and provides significant financial resources to further grow and develop our business," Frymire said in a statement.
Carlson Travel asked the bankruptcy judge last week for permission to hire an investment banker to evaluate potential bids for the company. But that filing was made in order to pay the firm for an aborted sales effort earlier this year.
"We are not up for sale," Walker said.
Jeffrey Meitrodt is an investigative reporter for the Star Tribune who specializes in stories involving the collision of business and government regulation.
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CWT significantly strengthens financial position through incremental investment
CWT Travel Holdings, Inc. (“CWT”), the global business travel and meetings solutions provider, announced it has completed recapitalization transactions that have significantly strengthened and deleveraged its balance sheet and provides a strong financial foundation with enhanced flexibility.
The transactions received overwhelming support beyond the required amount from CWT’s lenders, noteholders, and preferred and common equity holders. With consummation of these transactions, CWT has reduced its outstanding debt by over $450 million, substantially decreased its annual interest expense, and extended its debt maturities. In addition to equitizing CWT’s senior notes, certain stakeholders have also provided additional incremental liquidity. CWT is now owned by a consolidated group of investors with substantial capital bases committed to supporting the long-term growth of the business.
“We are pleased to have completed these transactions with the strong support of our financial stakeholders, whose constructive participation underscores their continued confidence in CWT,” said CEO Patrick Andersen. “This recapitalization has solidified our position as one of the industry’s leading travel management companies. With a strong financial foundation and capital structure, CWT will provide best-in-class service to customers and partners, invest in technology and people, and deliver on our product roadmap to meet the changing landscape of business travel.”
He continued, “As we move forward, we will continue to focus on providing our customers with greater choice, configurable solutions, channel-agnostic content, enhanced connectivity, and an unmatched traveler experience and service, coupled with deep data and forward-looking analytics to drive value.”
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Global Business Travel Group to acquire CWT for $570M
A merican Express Global Business Travel signed a definitive agreement to acquire CWT, valuing the global business travel and meetings solutions provider at about $570M on a cash-free, debt-free basis, said Global Business Travel ( NYSE: GBTG ) on Monday.
At the closing of the transaction, Amex GTB expects to issue about 71.7 million shares at a fixed price of $6.00 per share and to use cash on hand to fund the retirement of CWT debt and the remaining transaction consideration.
The acquisition was expected to break break-even to earnings per share in the first year of transaction close and accretive thereafter.
The deal would give CWT customers access to Amex GBT’s proprietary software and services for travel and expense, including Neo1, Neo, and Egencia, in addition to Select.
CWT serves 4,000 customers and is expected to generate approximately $850 million in revenues and $70 million–$80 million of Adjusted EBITDA in 2024, the company added.
The transaction is expected to close in the second half of 2024. GBTG shares were 5% higher in premarket trading.
- Source: Press Release
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COMMENTS
The primary business of Carlson Travel is CWT, formerly Carlson Wagonlit Travel, a global travel services company that employs more than 12,000 people in 45 countries. In 2019, CWT was a leader in ...
CWT. CWT (formerly Carlson Wagonlit Travel) is a travel management company that manages business travel, meetings, incentives, conferencing, exhibitions, and handles event management . Headquartered in Minneapolis, Minnesota, the company reported US$23 billion in total transaction volume in 2018. [1] It is ranked 5th on the list of top earning ...
Corporate travel agency CWT exited bankruptcy on Friday, ... The net result is that the agency has now eliminated about half its $1.6 billion debt, while it gains $350 million of new equity ...
2015 America's Richest Families Net Worth. as of 7/1/15. ... Carlson used the cash from the T.G. I. Friday deal to buy the 45% of Carlson Wagonlit Travel owned by JP Morgan Chase for a reported ...
By Rob Gill / 25 March 2024 / Contact Reporter. American Express Global Business Travel is to acquire major rival CWT in a deal worth $570 million after the boards of both companies approved the transaction. Amex GBT said that the deal would provide CWT's customers with "more choice and value", as well as leading to "greater capacity ...
Three-time Fab 50 company enjoyed a 65% hike in revenue last year, though net profits of $89 million rose only 5% due to higher costs. The largest logistics
CWT, formerly Carlson Wagonlit Travel, started in its current form in the mid-1990s and touts 4,000 customers with a projected revenue of approximately $850 million this year.
CWT has a market cap or net worth of $2.93 billion as of May 7, 2024. Its market cap has decreased by -6.73% in one year. Market Cap 2.93B. Enterprise Value 4.18B. 1-Year Change ... Market capitalization, also called net worth, is the total value of all of a company's outstanding shares. It is calculated by multiplying the stock price by the ...
Company profile page for CWT Travel Group Inc including stock price, company news, executives, board members, and contact information
CWT, the business travel company once owned by Minnesota's Carlson family, will be acquired by American Express Global Business Travel, an even bigger player in B2B travel services, in a $570 ...
Carlson is an American privately held company headquartered in Minnetonka, Minnesota, United States.Its primary subsidiaries is Carlson Private Capital Partners, a family office that manages the owners' wealth. It previously held interests in hotels, including Radisson Hotels, and restaurants, including TGI Fridays.The company is owned by Barbara Carlson Gage and Marilyn Carlson Nelson ...
CWT recently issued $90m of equity in a private fundraising amongst its shareholders, the net proceeds of which are designed to increase the company's flexibility to underpin strategic opportunities that will help to accelerate growth, expand its competitive advantage, and broaden value for its customers. ... CWT is a global business travel ...
American Express Global Business Travel has agreed a $570mn deal to buy rival CWT, in a bet on the continued recovery of business travel following the pandemic. AmexGBT, which offers booking and ...
By Kanchan Nath On Nov 14, 2023. CWT Travel Holdings, Inc. ("CWT"), the global business travel and meetings solutions provider, announced it has completed recapitalization transactions that ...
Patrick Andersen is President/Chief Executive Officer at Carlson Wagonlit Travel Inc. See Patrick Andersen's compensation, career history, education, & memberships.
American Express Global Business Travel signed a definitive agreement to acquire CWT, valuing the global business travel and meetings solutions provider at about $570M on a cash-free, debt-free ...
For the year ended December 31, 2019 its total transaction volume was $24.8 billion, with contracted new sales of $1.8 billion and revenues $1.53 billion. Skift approached CWT for comment on ...
CWT has named Judy Hendrick its permanent chief financial officer. Photo Credit: CWT. Prior to that, Hendrick had retired from her post of CFO and chief growth officer of Aimbridge Hospitality in ...
CWT unveils initial focus of $100m technology, innovation, and product investment plans. January. CWT commences celebrations of 150 years in travel. A heritage that traces back to 1872 when Belgian engineer and industrialist, George Nagelmackers, sold the American concept of sleeping cars to European rail operators.
The entire business travel market is worth $1.4 trillion, he said, and "SME is the biggest opportunity within that." Amex GBT Is Poised to Acquire CWT in the Second Half of 2024
The average Travel Consultant base salary at CWT is $41K per year. The average additional pay is $0 per year, which could include cash bonus, stock, commission, profit sharing or tips. The "Most Likely Range" reflects values within the 25th and 75th percentile of all pay data available for this role. Glassdoor salaries are powered by our ...
SEE ALL SERVICES. CWTSatoTravel provides travel services for U.S military and civilian government agencies. Whether you're traveling for work, reporting for duty, heading home from along trip or tour, or you and your family are taking a well-earned vacation, we're here to make your journey as smooth as possible.
Energy, resources and marine. Getting people to remote parts of the world can be complex. We specialize in all aspects of rotating workers, crew travel and personnel travel. More on energy industries travel. Through integrated sustainability data, tools, and solutions, we empower responsible travel choices that align with your sustainability goals.
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