Carlson Travel Company, known in the industry as CWT, is embarking on a transformative chapter in its history. A major financial restructuring is underway, designed to solidify the company’s future and enable it to capitalize on the anticipated resurgence of business travel. This strategic move will see the Carlson family, who founded the company, transition from majority to minority stakeholders, marking a significant shift in the ownership structure of this global travel management firm.
CWT, formerly recognized as Carlson Wagonlit Travel until its rebranding in 2019, has reached a pivotal agreement with its existing equity holders and creditors representing over 90% of its debt. This agreement injects $350 million of fresh equity into the business and dramatically reduces its debt burden by approximately $900 million. The restructuring replaces the existing $1.5 billion debt with a more manageable $625 million in new first lien debt, along with an available revolving credit facility. This financial overhaul is designed to provide a robust financial foundation for Carlson Travel Company moving forward. Key financial stakeholders involved in this agreement include Barings, among other institutional investors who have shown continued faith in the company’s potential.
CWT Headquarters
This financial restructuring, expected to be finalized by the end of the year, comes at a crucial time for the travel industry. CWT CEO Michelle McKinney Frymire, who assumed leadership in May, emphasizes that this is a proactive step to position Carlson Travel Company for future success. Speaking about the restructuring, McKinney Frymire highlighted the overwhelmingly positive response from major clients, underscoring the industry’s confidence in CWT’s strategic direction. Despite earlier speculation about potential acquisitions and new investors, the current restructuring involves existing stakeholders, demonstrating their deep understanding of the business and unwavering support for Carlson Travel Company’s long-term strategy. CWT will continue to operate as an independent entity, with debt holders becoming equity holders, many of whom already had minor equity positions.
The legacy of the Carlson family in the travel industry is deeply rooted. Founded in 1938 by Curt Carlson, the company’s evolution into Carlson Wagonlit Travel in 1994, through a partnership with Wagonlit Travel (formerly owned by Accor), cemented its position as a global leader in travel management. While Accor divested its stake in 2006, the Carlson name remained synonymous with the company until the 2019 rebranding to CWT. Even with the reduced stake, the Carlson family’s heritage remains an integral part of the company’s identity, even as it embraces this new chapter. The exact percentage of Carlson holdings post-restructuring is still to be determined, but the focus is clearly on a future-oriented strategy.
CWT Headquarters
Looking ahead, Carlson Travel Company is prioritizing investment in its workforce and technology to drive organic growth. CEO McKinney Frymire reassured that job cuts are not anticipated, as the company has already streamlined operations in recent years. Instead, CWT is actively seeking to fill 500 open positions globally, signaling a phase of expansion and reinvestment in its human capital. With a strengthened balance sheet boasting $400 million in available liquidity, CWT is well-equipped to invest in innovation and enhance its service offerings. While not actively pursuing acquisitions, Carlson Travel Company remains open to opportunities that strategically align with its growth objectives. The primary focus, however, remains on empowering its people and leveraging technology to deliver exceptional value to its clients in the evolving landscape of business travel.
The successful agreement with over 90% of debt holders underscores a significant vote of confidence in Carlson Travel Company and the broader business travel sector. This financial restructuring is not merely a balance sheet adjustment; it represents a strategic repositioning for a future where business travel is poised for a strong recovery. By proactively addressing its financial structure, Carlson Travel Company is not just weathering the storm but is actively preparing to lead the way in the revitalized world of corporate travel management. This move signals a robust belief in the enduring importance of business travel and Carlson Travel Company’s pivotal role within it.
