SAN FRANCISCO (08/28/2000) - In two separate announcements today, Sabre Inc.
Holdings said it has agreed to buy the Internet business travel services company GetThere for US$757 million in cash while planning to slash 1,200 jobs.
The job cuts during the next several months would reduce Sabre's workforce, currently at 10,500 jobs, by 11 percent. The cuts, through attrition and layoffs, are expected to save the Fort Worth, Tex.-based company $100 million annually beginning next year. Sabre, the world's largest travel reservations service, expects to take a charge of $20 million in the third quarter to cover the program's costs.
Sabre would pay $17.75 a share for GetThere, whose systems provide online travel services to employees at such companies as Boeing Co., Chevron Corp., Lucent Technologies Inc., Nike Inc. and Xerox Corp. GetThere also powers several airline Web sites.
GetThere would be combined with the Sabre Business Travel Solutions unit. The combined company would operate under the GetThere name at GetThere's headquarters in Menlo Park, Calif. GetThere Chairman, President and CEO Gadi Maier would become president of the combined organization and would report to William J. Hannigan, Sabre's chairman, president and CEO.
The combined business is expected to have revenues this year of about $50 million. The acquisition and job cuts would be expected to have a neutral effect on earnings next year. The deal is expected to close in the fourth quarter of 2000.
Sabre maintains a 70 percent ownership interest in Travelocity.com, which it introduced in 1996. AMR, the owner of American Airlines, spun off Sabre as an independent company in March.
Sabre reported $2.4 billion in revenues last year. Net earnings excluding special items totaled $264 million, up 15.2 percent from the prior year.
GetThere reported a net loss of $48.9 million in the fiscal year ended Jan. 31, on $15.5 million in revenues.
Sabre shares fell 69 cents, to $29.06, in midday trading, while GetThere shares soared $5.03, to $17.15.