Sabre IPO Priced Below Expectations

Travel technology provider Sabre Corp. sold fewer shares than planned as its initial public offering priced below the company's expectations, according to two people familiar with the pricing.

The Southlake, Texas-based company sold 39.2 million shares for $16 apiece, these people said, raising $627.2 million before the potential sale of additional shares to underwriters. Sabre had expected to sell 44.7 million shares for $18 to $20, according to a regulatory filing.

Sabre operates a so-called global distribution system, which acts as a clearinghouse for fares, schedules and seat availability for airlines. It owns the Travelocity website, but last year outsourced most of that site's operations-such as processing bookings and handling customer questions-to longtime rival Expedia Inc.

Sabre has posted steady revenue growth the past few years, but failed to turn a profit due to high costs, a heavy debt burden and write-downs related to a series of acquisitions.

Last year, the company's net loss narrowed to $137.2 million from $645.9 million a year earlier, as it recorded sharply lower impairment charges and saw revenue rise 2.5% to $3 billion.

It plans to pay a 9-cent quarterly dividend after going public, according to the filing. That equates to a dividend yield-a ratio of the annual dividend rate to the stock price-of 2.3% at the IPO offer price.

The offering marks the largest new U.S. listing for a technology company since prescription-data provider IMS Health Holdings Inc.'s $1.5 billion debut on April 3.

Private-equity firms TPG and Silver Lake Partners, which agreed to a buyout of Sabre for $4.5 billion and $550 million in assumed debt in late 2006, aren't selling any shares in the IPO and will continue to own most of the company's largest two holders.

Sabre is scheduled to open on the Nasdaq Stock Market Thursday under the symbol "SABR." Morgan Stanley is leading the offering with Goldman Sachs Group Inc., Bank of America Merrill Lynch and Deutsche Bank AG.

Write to Matt Jarzemsky at [e-mail]

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