Good news for frequent flyers: the New York private equity firm Warburg Pincus has acquired Mercator, a Dubai information technology company that helps airlines track your luggage, from Dnata, part of the Emirates Group.
Warburg Pincus was attracted to Mercator’s “strong client base, product offering, people and growth potential”, according to a spokeswoman.
Warburg Pincus did not disclose the value of the acquisition, or Mercator’s revenues. However, Dnata earned Dh755 million from IT services in 2012.
Joseph Schull, Warburg Pincus’s European chief, told Bloomberg News: “This business can be a multiple of its current size.”
Mercator also sells software to help airlines to develop their own loyalty programmes, handle revenues and cope with “safety incidents”. It employs about 400 people in Dubai and lists more than 125 airlines as its clients.
Warburg Pincus said that it would like Mercator to launch further products in shipping and safety, and said that “an international expansion is certainly on the horizon”.
The company also suggested that it would seek to acquire new firms to merge with Mercator, but declined to offer specifics.
It will be Warburg Pincus’s first Middle East investment. The company manages more than US$37 billion in assets and recently added the former US Treasury secretary Timothy Geithner to its management team.
Warburg Pincus previously invested in and, in 2006, floated a similar airline tech company, WNS Global Services, after acquiring it from British Airways. The company told Bloomberg that it sold WNS for a “multiple” of its purchase price.
David Tibble, the former executive chairman of WNS, will take over the same role at Mercator.
Dnata will retain a minority stake in Mercator.
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