Travelocity parent company Sabre could raise up to $750M in IPO

Sabre may have helped you enjoy a vacation — and you didn’t even know it.

Sabre is the parent company behind Travelocity, a popular website for booking flights, hotels, rental cars, activities, and finding travel deals. Sabre revealed its intent to go public today and said it could raise up to $100 million. But this could be a bit conservative: IPO research firm Renaissance Capital estimates that Sabre will actually raise upward of $750 million and that the $100 million number is just a “placeholder.”

Sabre was founded in 2006 and operates four businesses — Sabre Airline Solutions, Sabre Hospitality Solutions, Sabre Travel Network, and Travelocity. As the consumer-facing brand, Travelocity is the most well known.

However, its other brands also have a wide reach — the Sabre Travel Network distributes content from 125,000 suppliers to 400,000 travel agents. Sabre Airline Solutions claims it’s the top global distribution Ssystem (GDS) provider in North America for airline bookings (meaning you have probably used its tech to book a flight) and that its hotel central reservation system (CRS) had the largest “room share” in 2012.

Sabre claims that 225 airlines, 4,800 hospitality providers, and 700 other travel suppliers use its software.

With all these businesses, Sabre processed over $100 billion of estimated travel spending and more than 1.1 trillion system messages. It booked $2.3 billion in sales for the nine months ending in Sept. 30.

The global travel industry generated $6.6 billion in 2012. It is a huge sector, but it’s also highly competitive. Travelocity competes with Priceline, Expedia, Orbitz, Kayak, Hipmunk, Booking.com, and others. Interestingly, in August, Travelocity signed an “exclusive, long-term strategy marketing agreement” with Expedia.

Its primary competitor in the enterprise is Amadeus, an airline GDS provider that recently spent $500 on an acquisition to move into hotel IT. Sabre said it stands out by offering the broadest portfolio in the travel industry and providing an end-to-end solutions.

The “risk factor” portion of the filing dragged on for pages and pages, including the volatility of the global travel industry and Sabre’s reliance on relationships with third parties.

Sabre also said that it is currently involved in various legal proceedings, such as antitrust litigation with US Airways and class action lawsuits “alleging a conspiracy” among online travel agencies and hotels to fix prices.

Another risk is that Sabre needs more cash than it generates and has debt. The company had a net loss $127 million in the ninth months ending in Sept. 30.

The Southlake, Texas-based company is now setting its sights abroad, looking to expand in Europe, the Asia-Pacific region and Latin America as well as continue growth in the Middle East and Russia.