(Reuters) - A consortium of buyout firm Siris Capital Group LLC and hedge fund Elliott Management is nearing an agreement to acquire travel software company Travelport Worldwide Ltd (TVPT.N), people familiar with the matter said on Thursday.
The acquisition would mark the culmination of an eight-month-long effort by Elliott to clinch a deal for Travelport. The New York-based fund disclosed a 12 percent stake in the company in March and pushed it to explore a sale.
Siris and Elliott hope to successfully conclude negotiations with Travelport as early as next week, after a group of banks agreed to offer debt financing for their bid, the sources said on Thursday.
While the exact price for Travelport that Siris and Elliott are discussing could not be learnt, the sources said a deal would come at a small premium. Travelport shares were trading up 8.4 percent in New York at $16.20 on the news on Thursday morning, giving the company a market capitalisation of more than $2 billion (1.57 billion pounds). Travelport, based in Langley, England, also has a significant debt pile, totalling about $2.3 billion as of the end of September.
There is always a chance that deal negotiations could collapse at the last minute, the sources said, asking not to be identified because the matter is confidential. Travelport, Elliott and Siris declined to comment.
A sale of Travelport would mark the second time this year that Elliott participated in a leveraged buyout. Last month, it teamed up with private equity firm Veritas Capital Fund Management LLC to acquire healthcare technology company Athenahealth Inc ATHN.O for $5.5 billion. In 2017, it partnered with Qatar Investment Authority to buy network-monitoring software maker Gigamon for $1.6 billion.
Elliott is also currently trying to engineer another leveraged buyout. It has proposed a structure to address potential liabilities weighing on the sale process of U.S. aluminium products maker Arconic Inc (ARNC.N), in which it has a stake and board representation, Reuters reported last week. Elliott may team up with private equity firm Apollo Global Management LLC (APO.N), which is currently negotiating the acquisition of Arconic, sources have said.
Travelport has remained focussed on its stable but relatively slow-growing business of providing technology infrastructure to travel vendors for hotels and other travel destinations. Its shares are trading around the same level as when it became a publicly traded company four years ago.
Travelport generated net revenue of $622.5 million in its quarter ended Sept. 30, up about 2 percent from $610.84 million a year earlier. Its net income rose 25 percent to $5.87 million.
Reporting by Liana B. Baker and Greg Roumeliotis in New York; Editing by Steve Orlofsky