A three-year-old company is about to buy the world's largest corporate travel platform. And Wall Street is helping foot the bill.
JPMorgan has started selling $2.5 billion in debt to fund Long Lake's $6.3 billion buy of Amex GBT. The pitch to investors began this week.
Long Lake isn't a household name, but it has moved fast since it started in 2023.
In that short time it has bought about 30 firms across home, business, and basic services. Amex GBT would be its biggest catch yet.
The plan, common in private equity, is to buy lots of small firms and bolt them together.
Think of it like a snowball rolling downhill, picking up companies as it goes.
What sets Long Lake apart is that it likes to buy and hold, not flip. That's rare for a firm its age.
Backing the deal are big names like General Catalyst, Alpha Wave, and Koch Equity Development. They are putting up the cash that sits under the debt.
Deals like this say a lot about where money is moving, and we unpack them every morning in Market Briefs - in five minutes, plus a free investing masterclass when you join.
Here's the part Wall Street is watching, because the banks are testing how hungry investors are for buyout loans right now.
To make the deal tempting, JPMorgan is offering a $1.5 billion slice at a small discount, 99 cents on the dollar.
A discount like that is a sweetener. Buyers pay a bit less up front, which lifts their return.
Bank of America, Citi, and MUFG are helping sell the rest. The debt is split across two markets, bank loans and bonds.
Banks like these earn fees for finding buyers for the debt. The bigger the deal, the bigger the payday.
There's also a $250 million credit line on top, the kind of backup cash a firm can tap when it needs it.
If the debt sells well, money is flowing freely again. If it stalls, that tells its own story.
Amex GBT is the platform big companies use to book and manage work travel. It's the largest of its kind in the world.
Its shareholders aren't waiting on the suspense, since they get $9.50 a share in cash. That's about 60% more than the stock fetched in early May.
Investors get the cash now, while Long Lake takes on the debt and the risk.
The rest of us get a read on the market, because a smooth sale would signal that big buyout deals are back.
The deal still needs shareholder and regulator sign-off, and it should close in the second half of the year.
A weak sale could force the banks to sweeten the terms, while a strong one would clear the path.
The debt sale is the first real test.
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