Strata was exclusive financial adviser to Warburg Pincus International

Exclusive financial adviser to Warburg Pincus International on their carve-out of the third party software business of Emirates Group, trading as “mercator"

2014

Transaction Summary

Strata was exclusive financial adviser to Warburg Pincus International on their buyout by means of a carve-out of the third party software business of Emirates Group, trading as “mercator”.

Transaction Overview

  • Strata Partners advised Warburg Pincus, a leading global private equity firm with more than $37 billion in assets under management, on its carve out of Emirates Group’s third party airline IT business, trading as Mercator. Dubai-based Mercator provides software and tech-enabled outsourcing solutions to over 100 global and regional airlines
  • Strata approached Warburg Pincus as the private equity firm best positioned to convince the Emirates Group to accept a buyout of Mercator, due in particular to Warburg Pincus’ carve out of WNS from British Airways in 2002*
  • Strata positioned the opportunity with the Warburg Pincus team, who agreed to approach Emirates Group. Strata assisted Warburg Pincus in planning their approach, addressing Emirates Group’s initial concerns about selling to a private equity investor, and building the case that an investment by Warburg Pincus would also be a significant opportunity for Dubai as a leading global transportation and travel hub. Strata also provided Warburg Pincus with ongoing insight into the aviation software industry and provided support throughout the negotiation and due diligence phases of the transaction
  • Warburg Pincus was able to obtain a majority shareholding in the new Mercator entity, with Emirates Group demonstrating their ongoing commitment to Mer‎cator by maintaining a substantial minority stake. No transaction value was disclosed

Transaction Highlights

  • This is Strata’s fourth travel & hospitality technology transaction since 2010‎; Strata has now undertaken transactions in hotel technology (sale of Amadeus Hospitality); airport software (sale of Zebra Technology’s airport software business); rail and public transport technology (sale of ecebs by thetrainline.com); and now aviation software and services
  • The transaction was also Strata’s first deal in the Middle East (as well as Warburg Pincus’ first ever investment in the region)
  • Finally, our understanding of the challenges facing captive IT businesses and our experience of advising on carve outs enabled us assist Warburg Pincus throughout their initial assessment of the business and the ensuing due diligence and negotiation process

*Warburg Pincus sold their remaining stake in WNS, which listed on the NYSE in July 2006, in February 2013

*Case study available on request*