CHICAGO–(BUSINESS WIRE)–Hyatt Hotels Corporation (NYSE: H) immediately introduced that Hyatt has entered right into a definitive settlement to accumulate Apple Leisure Group (ALG), a number one luxurious resort-management companies, journey and hospitality group, from associates of every of KKR and KSL Capital Companions, LLC for $2.7 billion in money. The transaction is anticipated to shut within the fourth quarter of 2021, topic to customary closing circumstances.
ALG’s resort model administration platform AMResorts® gives administration companies to the most important portfolio of luxurious all-inclusive resorts within the Americas below the AMRTM Assortment model portfolio, together with well-known manufacturers Secrets and techniques® Resorts & Spa, Goals® Resorts & Spas, Breathless® Resorts & Spas and Zoëtry® Wellness & Spa Resorts in addition to the fast-growing Alua® Inns & Resorts model, which is increasing in European leisure locations. The acquisition additionally contains ALG’s membership providing, Limitless Trip Membership®, journey distribution enterprise ALG Holidays®, in addition to vacation spot administration companies and journey expertise belongings. Following the completion of the transaction, ALG’s enterprise will proceed to be led by present ALG CEO Alejandro Reynal and the present ALG management crew. Mr. Reynal will grow to be a member of Hyatt’s govt management crew and report back to Hyatt CEO Mark Hoplamazian.
“With the asset-light acquisition of Apple Leisure Group, we’re thrilled to carry a extremely fascinating impartial resort administration platform into the Hyatt household,” stated Mark Hoplamazian, president and chief govt officer, Hyatt. “The addition of ALG’s properties will instantly double Hyatt’s world resorts footprint. ALG’s portfolio of luxurious manufacturers, management within the all-inclusive phase and enormous pipeline of recent resorts will lengthen our attain in present and new markets, together with in Europe, and additional speed up our industry-leading internet rooms development. Importantly, the mixture of this value-creating acquisition and the $2 billion enhance in our asset sale dedication will rework our earnings profile, and we count on Hyatt to succeed in 80% fee-based earnings by the tip of 2024.”
ALG’s resort portfolio consists of over 33,000 rooms working in 10 international locations. The portfolio has grown from 9 resorts in 2007 to roughly 100 properties by the tip of 2021 and has a pipeline of 24 executed offers with numerous further lodges within the growth course of. ALG’s Limitless Trip Membership® is an unique journey membership whose individuals get pleasure from most well-liked charges and different advantages at AMR™ Assortment properties. With over 110,000 members, Limitless Trip Membership® membership has grown at a compounded annual development price of 18% during the last 5 years.
“Combining Hyatt’s deep experience and world model footprint with ALG’s robust resort manufacturers, working capabilities and strong growth plans will elevate our differentiated place and create a pacesetter in luxurious leisure journey,” stated Alejandro Reynal, chief govt officer, Apple Leisure Group. “On behalf of everybody at ALG, I’m grateful to our companions at KKR and KSL who supported us in constructing the platform into what it’s immediately. I’m excited to have our crew be part of the Hyatt household and I anticipate a sturdy development journey forward because the {industry} expands and we’re capable of present a best-in-class leisure providing to a fair bigger group of vacationers around the globe.”
“Immediately is a superb milestone in what has been a narrative of development, resilience, and dedication to world-class leisure experiences by an impressive crew at Apple Leisure Group,” stated Chris Harrington and Wealthy Weissman, companions at KKR and KSL Capital Companions, respectively. “There’s merely no higher house for ALG to proceed on its development trajectory than being a part of Hyatt.”
Strategic Rationale
- Broaden footprint in luxurious and resort journey: The acquisition will broaden Hyatt’s presence in luxurious leisure journey and instantly add roughly 100 lodges and a pipeline of 24 executed offers in Europe and the Americas to its portfolio. Following completion of the transaction, Hyatt will supply the most important portfolio of luxurious all-inclusive resorts on this planet, will double its world resort footprint, would be the largest operator of luxurious lodges in Mexico and the Caribbean, and can broaden its European footprint by 60 p.c. The acquisition will lengthen Hyatt’s model footprint into 11 new European markets, enormously enhancing Hyatt’s development potential in Europe, a important area for world development in leisure journey.
- Broaden platform for development: ALG’s robust developer and proprietor base will broaden Hyatt’s relationships with deeply dedicated companions in key complementary geographies. Hyatt’s world community of builders and its operational experience is anticipated to additional speed up development of ALG manufacturers. Hyatt plans to use the mixed energy of the groups to broaden past ALG’s present pipeline in new geographies by which ALG doesn’t presently have lodges.
- Profit homeowners: Entry to ALG’s owned distribution platforms and its intensive expertise in leisure journey are anticipated to supply vital alternatives for Hyatt’s present resorts. Homeowners of AMRTM Assortment properties will obtain elevated entry to a much wider assortment of manufacturers, and the backing of Hyatt’s world distribution, gross sales and advertising.
- Improve alternative and experiences for company: The mixed sources of ALG and Hyatt will open up expanded choices and experiences for the advantage of the mixed firms’ high-end visitor and buyer base. ALG’s unique membership providing, Limitless Trip Membership®, will carry greater than 110,000 extremely passionate vacationers nearer to Hyatt when touring for quite a lot of keep events aside from holidays. Following completion of the transaction, Hyatt will decide methods by which World of Hyatt and Limitless Trip Membership® can carry added worth and distinctive loyalty advantages to their member bases whereas benefitting resort homeowners.
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Improve end-to-end leisure journey choices via:
- ALG Holidays® as one of many largest packaged tour suppliers and leisure journey distribution platforms in North America serving Mexico and the Caribbean,
- Amstar, a number one vacation spot companies administration firm in Mexico and the Caribbean, and its Hawaii-focused counterpart Worldstar, and
- Trisept Options®, its distinctive leisure journey expertise platform.
- Speed up asset-light technique: The acquisition of ALG’s asset-light enterprise will meaningfully enhance the proportion of revenues and earnings Hyatt will generate from charges. Moreover, Hyatt anticipates fulfilling its present dedication to promote $1.5 billion of resort actual property in 2021, leading to a complete of over $3 billion of proceeds realized because the asset-sale technique was introduced in 2017 at a mixed a number of of over 17x EBITDA as in comparison with Hyatt’s authentic estimate of 13x to 15x. Hyatt is additional committing to an extra $2 billion in proceeds from the sale of resort actual property by the tip of 2024.
Financing
At closing, Hyatt expects to fund greater than 80 p.c of the acquisition with a mixture of $1.0 billion of money available and new debt financings, and the rest with roughly $500 million from fairness financing. Hyatt has secured a $1.7 billion financing dedication from J.P. Morgan. Money proceeds from the $2 billion asset sale program are anticipated for use to pay down debt, together with debt incurred to fund the acquisition. Hyatt is dedicated to sustaining an funding grade profile and to proceed managing the stability sheet prudently after the transaction.
Investor Presentation, Convention Name, Webcast
Hyatt will maintain a convention name and webcast tomorrow, August 16, 2021, at 7:30 a.m. CDT to debate the transaction. events might hearken to a simultaneous webcast of the convention name, which can be accessed via the Firm’s web site at traders.hyatt.com. Alternatively, individuals might entry the reside name by dialing 833-238-7946 (U.S. Toll-Free) or 647-689-4468 (Worldwide Toll Quantity) utilizing convention ID# 1771444 roughly quarter-hour previous to the scheduled begin time. An archive of the webcast will probably be accessible on the Firm’s web site for 90 days.
Advisors
In reference to the transaction, BDT & Firm, LLC and J.P. Morgan served as monetary advisors to Hyatt, and Latham & Watkins LLP acted as its authorized advisor. PJT Companions served as monetary advisor to ALG, and Simpson Thacher & Bartlett LLP acted as its authorized advisor. Deutsche Financial institution Securities Inc. served as monetary advisor to KKR and KSL Capital Companions.
The time period “Hyatt” is used on this launch for comfort to seek advice from Hyatt Inns Company and/or a number of of its associates.
About Hyatt Inns Company
Hyatt Inns Company, headquartered in Chicago, is a number one world hospitality firm providing 20 premier manufacturers. As of June 30, 2021, the Firm’s portfolio included greater than 1,000 resort and all-inclusive properties in 68 international locations throughout six continents. The Firm’s objective to take care of individuals to allow them to be their finest informs its enterprise choices and development technique and is meant to draw and retain prime workers, construct relationships with company and create worth for shareholders. The Firm’s subsidiaries function, handle, franchise, personal, lease, develop, license, or present companies to lodges, resorts, branded residences, and trip possession properties, together with below the Park Hyatt®, Miraval®, Grand Hyatt®, Alila®, Andaz®, The Unbound Assortment by Hyatt®, Vacation spot by Hyatt™, Hyatt Regency®, Hyatt®, Hyatt Ziva™, Hyatt Zilara™, Thompson Inns®, Hyatt Centric®, Caption by Hyatt, JdV by Hyatt™, Hyatt Home®, Hyatt Place®, tommie™, UrCove, and Hyatt Residence Membership® model names, and operates the World of Hyatt® loyalty program that gives distinct advantages and unique experiences to its valued members. For extra data, please go to www.hyatt.com.
About Apple Leisure Group®
Apple Leisure Group® (ALG) is a number one North American resort brand-management, journey and hospitality group with a singular enterprise mannequin serving vacationers and locations worldwide. ALG, via its group of affiliated firms, persistently delivers distinctive worth to vacationers and powerful efficiency to resort homeowners and companions by strategically leveraging its portfolio of manufacturers together with: AMResorts LP, or a number of of its associates which collectively present gross sales, advertising, and model administration companies to resort and resort manufacturers below the AMR™ Assortment together with 5-star and 4-star luxurious award-winning manufacturers together with Secrets and techniques® Resorts & Spas, Goals® Resorts & Spas, Breathless® Resorts & Spas, Zoëtry® Wellness & Spa Resorts, Alua® Inns & Resorts, Sunscape® Resorts & Spas and Now® Resorts & Spas; ALG Holidays®, one of many largest sellers of trip packages and constitution flights within the U.S. for journey to Mexico and the Caribbean, with well-established manufacturers: Apple Holidays®, Funjet Holidays®, Journey Impressions®, CheapCaribbean.com®, BeachBound®, Blue Sky Excursions®, Southwest Holidays®, and United Holidays®; the unique membership program Limitless Trip Membership®; best-in-class vacation spot administration companies supplied by Amstar DMC; and the revolutionary expertise options supplier Trisept Options®, connecting over 88,000 journey brokers with main journey suppliers.
To study extra concerning the Apple Leisure Group benefit, go to www.appleleisuregroup.com.
FORWARD-LOOKING STATEMENTS:
Ahead-Wanting Statements on this press launch, which aren’t historic details, are forward-looking statements inside the that means of the Non-public Securities Litigation Reform Act of 1995. These statements embody statements concerning the Firm’s proposed acquisition of Apple Leisure Group, together with anticipated monetary and operational advantages ensuing from the acquisition, visitor and proprietor benefits arising from the acquisition, projected monetary efficiency of Apple Leisure Group, the quantity and timing of future asset inclinations and projected gross sales multiples of such asset inclinations, the Firm’s liquidity profile, the variety of properties anticipated to open sooner or later, the anticipated development of world luxurious journey and the Firm’s system-wide leisure room income combine, the projected future charge primarily based earnings of the mixed firm, anticipated advantages and added worth from the World of Hyatt loyalty program and Apple Leisure Group’s membership providing, anticipated financing sources for the proposed acquisition of Apple Leisure Group, the impression of indebtedness incurred in reference to the acquisition on the Firm’s funding grade ranking standing, the anticipated timeline for finishing the acquisition, the Firm’s plans, methods, outlook, monetary efficiency, projections, financing proposals, prospects or future occasions and contain identified and unknown dangers which are tough to foretell. In consequence, our precise outcomes, efficiency or achievements might differ materially from these expressed or implied by these forward-looking statements. In some circumstances, you possibly can establish forward-looking statements by way of phrases akin to “might,” “may,” “count on,” “intend,” “plan,” “search,” “anticipate,” “consider,” “estimate,” “predict,” “potential,” “proceed,” “doubtless,” “will,” “would” and variations of those phrases and comparable expressions, or the unfavourable of those phrases or comparable expressions. Such forward-looking statements are essentially primarily based upon estimates and assumptions that, whereas thought-about affordable by us and our administration, are inherently unsure. Elements that will trigger precise outcomes to vary materially from present expectations embody, amongst others, dangers related to the flexibility to consummate the proposed acquisition of Apple Leisure Group and the timing of the closing of the proposed transaction; the Firm’s potential to efficiently combine Apple Leisure Group’s workers and operations into the Firm; the flexibility to understand the anticipated advantages and synergies of the proposed acquisition of Apple Leisure Group as quickly or to the extent anticipated; dangers associated to the flexibility to acquire any contemplated financing on favorable phrases or in any respect; dangers affecting the posh and all-inclusive lodging segments; the length of the COVID-19 pandemic and the tempo of restoration following the pandemic, any further resurgence, or COVID-19 variants; the brief and longer-term results of the COVID-19 pandemic, together with the demand for journey, transient and group enterprise, and ranges of shopper confidence; the impression of the COVID-19 pandemic, any further resurgence, or COVID-19 variants, and the impression of actions that governments, companies, and people soak up response, on world and regional economies, journey limitations or bans, and financial exercise, together with the length and magnitude of its impression on unemployment charges and shopper discretionary spending; the broad distribution of COVID-19 vaccines and large acceptance by the overall inhabitants of such vaccines; the flexibility of third-party homeowners, franchisees, or hospitality enterprise companions to efficiently navigate the impacts of the COVID-19 pandemic, any further resurgence, or COVID-19 variants; normal financial uncertainty in key world markets and a worsening of world financial circumstances or low ranges of financial development; the speed and the tempo of financial restoration following financial downturns; ranges of spending in enterprise, leisure, and all-inclusive segments in addition to shopper confidence; declines in occupancy and common every day price; restricted visibility with respect to future bookings; lack of key personnel; home and worldwide political and geo-political circumstances, together with political or civil unrest or adjustments in commerce coverage; hostilities, or concern of hostilities, together with future terrorist assaults, that have an effect on journey; travel-related accidents; pure or man-made disasters akin to earthquakes, tsunamis, tornadoes, hurricanes, floods, wildfires, oil spills, nuclear incidents, and world outbreaks of pandemics or contagious illnesses, such because the COVID-19 pandemic, or concern of such outbreaks; our potential to efficiently obtain sure ranges of working earnings at lodges which have efficiency assessments or ensures in favor of our third-party homeowners; the impression of resort renovations and redevelopments; dangers related to our capital allocation plans, share repurchase program, and dividend funds, together with a discount in, or elimination or suspension of, repurchase exercise or dividend funds; the seasonal and cyclical nature of the actual property and hospitality companies; adjustments in distribution preparations, akin to via web journey intermediaries; adjustments within the tastes and preferences of our clients; relationships with colleagues and labor unions and adjustments in labor legal guidelines; the monetary situation of, and {our relationships} with, third-party property homeowners, franchisees, and hospitality enterprise companions; the potential incapability of third-party homeowners, franchisees, or growth companions to entry capital essential to fund present operations or implement our plans for development; dangers related to potential acquisitions and inclinations and the introduction of recent model ideas; the timing of acquisitions and inclinations and our potential to efficiently combine accomplished acquisitions with present operations; failure to efficiently full proposed transactions (together with the failure to fulfill closing circumstances or receive required approvals); our potential to efficiently execute on our technique to broaden our administration and franchising enterprise whereas on the identical time lowering our actual property asset base inside focused timeframes and at anticipated values; declines within the worth of our actual property belongings; unexpected terminations of our administration or franchise agreements; adjustments in federal, state, native, or international tax legislation; will increase in rates of interest and working prices; international alternate price fluctuations or foreign money restructurings; lack of acceptance of recent manufacturers or innovation; normal volatility of the capital markets and our potential to entry such markets; adjustments within the aggressive setting in our {industry}, together with because of the COVID-19 pandemic, {industry} consolidation, and the markets the place we function; our potential to efficiently develop the World of Hyatt loyalty program; cyber incidents and data expertise failures; outcomes of authorized or administrative proceedings; and violations of rules or legal guidelines associated to our franchising enterprise; and different dangers mentioned within the Firm’s filings with the SEC, together with our annual report on Type 10-Ok and quarterly experiences on Type 10-Q, which filings can be found from the SEC. We warning you to not place undue reliance on any forward-looking statements, that are made solely as of the date of this press launch. We don’t undertake or assume any obligation to replace publicly any of those forward-looking statements to mirror precise outcomes, new data or future occasions, adjustments in assumptions or adjustments in different components affecting forward-looking statements, besides to the extent required by relevant legislation. If we replace a number of forward-looking statements, no inference needs to be drawn that we’ll make further updates with respect to these or different forward-looking statements.
