It had to be done. For KDS to continue to scale, the company had to be acquired, according to CEO Dean Forbes, and American Express Global Business Trav- el, one of many interested parties, sealed the deal on
Oct. 4. Amex GBT has explained why the deal is good for
the travel management company, and now Forbes has spoken about how it benefits KDS.
Why did you decide to sell the company?
We talked about it a lot, but we never said, “Let’s go be
acquired.” When I look back 18 months, I wasn’t really
thinking about it, but it was inevitable. After we launched
Neo [in 2013], I got more calls about buying the company.
The trajectory has grown and grown in the last two years,
and we had a bunch of offers. There were different reasons
[why they didn’t work out]. Some were for money. Some
weren’t culturally a fit for the company or customers. Others were a combination of timing and value alignment.
How have your TMC partners reacted to the news?
We’re going to be an independent company, which dictates
how data and information can or can’t be shared. If we
have a contract with a corporate customer that says their
data can be used by KDS only, I can’t share that information with GBT. Things like [the Payment Card Industry Data Security Standard] govern the way information
is managed and shared, so I can’t suddenly take Carlson
[Wagonlit Travel’s] information and ship it to Amex so
they can corner [CWT’s] customer. Not that I want to do
that. I wouldn’t and legally am unable to do that. That has
given partners some degree of security. Of course, there is
an emotional element of, “I’m relying on my technology
partner, which is owned by our No. 1 or No. 2 competitor.”
We have half of our business with partners, and I’m hopeful that continues.
Amex’s strategy is to build digital products focused
on the traveler experience. How does KDS fit in?
One of the biggest issues in delivering value in this space
is that you’re always aggregating on behalf of a customer.
The pain point for the customer is that they’re relying on
others—other technology, people and suppliers—to get
their hands on that [data]. Amex wants to offer customers a
true end-to-end proprietary offering that is all managed by
them to eliminate all the loose threads when one third party
is relying on another. For them to deliver that end-to-end
solution, they need a lot of the technology we have, as well as
the skills and capabilities to develop that technology.
What does KDS get out of this deal?
We put our foot into some new geographies and we’ve done
well, but it’s going to be difficult for us to scale to the next level.
We went from one person in North America to six or seven.
Getting from seven to 50 was going to be difficult for us but as
part of Amex will be much easier. Scaling in other geographies
will be much easier, too. For a long time, we also had to deal
with a brand issue. I don’t know how many times we competed to the end and people said, “We love your technology, your
products, your people. We want to choose you, but we’re talking
about a $55 million program in 20 different countries. I’m having a tough time getting my executive team to be comfortable
with a 150-person Paris-headquartered company.” Concur
never had that problem. It’s a global brand and a few years back
listed on the stock exchange. That brand and stability question
is now taken care of, and we get access to Amex’s customers.
How much overlap in customers is there?
In France, most of their customers are ours and we have some
[overlapping] customers in the U.K., but beyond that, almost
none of their customers are ours.
Amex has said it’s not focused on expense. Will KDS
stop investing in its expense tool?
There’s no plan to stop investing in any product within our
composition today. There is a dominant activity, which is about
enabling their strategy, and another big part of our activity is
to continue to charter our own course, with some refinement
because now we have new owners.
Will KDS integrate fully into Amex GBT, kind of like a
I couldn’t tell you “never,” but that’s not the plan at the moment.
The plan is to make sure we continue to operate as a stand-alone company owned by Amex, which has some obligations
because they’re 50 percent owned by a bank. So some of our
cavalier but legal business practices will have to be refined.