Addition of Alila, Destination, Joie de Vivre, Thompson and tommie
brands to the Hyatt portfolio will strengthen Hyatt’s lifestyle and
wellbeing offerings for high-end travelers worldwide
CHICAGO--(BUSINESS WIRE)--
Hyatt
Hotels Corporation (NYSE: H) today announced an agreement to acquire Two
Roads Hospitality, an international lifestyle hotel management
company with a unique collection of distinctive brands, properties and a
robust development pipeline around the globe.
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Terranea, A Destination Hotel, Palos Verdes, CA, USA (Photo: Business Wire)
Through the addition of Two Roads, its established lifestyle brands and
the management agreements for the majority of its 85 properties in eight
countries, Hyatt will expand its brand presence into 23 new markets
while enhancing its offerings in lifestyle hotel experiences and
wellbeing. With Two Roads and its distinctive collection of lifestyle
hotels, resorts and vacation residences, Hyatt will offer an expanded
and more powerful portfolio of brands with best-in-class offerings to
deliver compelling experiences and benefits for guests and World of
Hyatt members, expand its relationship with valued hotel owners, and
drive growth for shareholders.
“Hyatt and Two Roads share a commitment to genuine care and delivering
distinctive experiences to discerning travelers. We are pleased to be
coming together, and are dedicated to learning from each other and
taking the best of both organizations forward,” said Mark Hoplamazian,
president and chief executive officer, Hyatt Hotels Corporation. “Two
Roads’ passionate team members, strong brands, global footprint and
robust development pipeline will expand our lifestyle offerings and grow
Hyatt’s brand presence in more places where our guests and World of
Hyatt members want to travel. Importantly, combining Two Roads’
meaningful brand presence and development plans in Asia with Hyatt’s
already strong position in this region will allow us to accelerate
expansion in this critically important and fast-growing part of the
world.”
The acquisition consists of a base purchase price of $480 million, with
the potential for Hyatt to invest up to an additional $120 million in
the aggregate, contingent on the outcome of certain terms to be
individually defined after closing. The base plus contingent total
purchase price is expected to reflect an EBITDA multiple of
approximately 12-13x stabilized 2021 earnings, which Hyatt considers the
best indicator of valuation based on anticipated synergies and growth.
Consistent with Hyatt’s long-term growth strategy to drive shareholder
value, this investment in a high-growth, capital-light platform
accelerates Hyatt’s evolution to a more fee-driven enterprise, funded by
proceeds from an asset disposition program in which real estate has been
monetized at an average multiple of approximately 16.5x EBITDA to date.
Notably, Hyatt is making this growth investment in a year in which it
has committed to return approximately $800 million of shareholder
capital through a combination of share repurchases and a cash dividend.
After the close of the transaction, which is expected later this year,
Hyatt will create a dedicated lifestyle division as a catalyst to bring
together the operations of Two Roads’ and Hyatt’s lifestyle brands.
“Hyatt is an ideal home for us as we share many values and a deep
commitment to thoughtful growth and creating compelling experiences for
our guests,” said Jamie Sabatier, chief executive officer, Two Roads
Hospitality. “Hyatt’s unique position in the marketplace brings with it
the powerful benefit of global scale while maintaining meaningful
personal relationships with team members, guests and owners.”
Hyatt will provide additional information related to the acquisition,
including a preliminary estimate of 2019 earnings accretion, on its
third quarter earnings call scheduled for October 31, 2018. Hyatt plans
to integrate Two Roads brands into the World of Hyatt program in 2019,
expanding opportunities for World of Hyatt members to earn and redeem
points across more leisure-focused stay options and also driving hotel
occupancy from a loyal group of travelers who spend more, stay more and
book directly.
Goldman Sachs & Co. LLC served as exclusive financial advisor to
Hyatt; Moelis & Company LLC served as exclusive financial advisor to Two
Roads Hospitality; Latham & Watkins LLP served as legal counsel to
Hyatt; Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel
to Two Roads Hospitality.
The term “Hyatt” is used in this release for convenience to refer to
Hyatt Hotels Corporation and/or one or more of its affiliates. Hyatt
plans to include Two Roads’ properties in its World of Hyatt loyalty
program, but such properties are not currently participating.
About Hyatt Hotels Corporation
Hyatt Hotels Corporation, headquartered in Chicago, is a leading global
hospitality company with a portfolio of 14 premier brands. As of June
30, 2018, the Company's portfolio included more than 750 properties in
more than 55 countries across six continents. The Company's purpose to
care for people so they can be their best informs its business decisions
and growth strategy and is intended to attract and retain top
colleagues, build relationships with guests and create value for
shareholders. The Company's subsidiaries develop, own, operate, manage,
franchise, license or provide services to hotels, resorts, branded
residences, vacation ownership properties, and fitness and spa
locations, including under thePark Hyatt®, Miraval®,
Grand Hyatt®, Hyatt Regency®, Hyatt®, Andaz®,
Hyatt Centric®, The Unbound Collection by Hyatt®, Hyatt
Place®, Hyatt House®, Hyatt Ziva™,
Hyatt Zilara™, Hyatt Residence Club® andexhale®
brand names. For more information, please visitwww.hyatt.com
About Two Roads Hospitality
Created in September 2016, Two Roads Hospitality is an international
lifestyle company encompassing an unrivaled collection of distinctive
properties, passionate people, and remarkable experiences around the
globe. The company is named for the recently-merged Commune and
Destination Hotels, bringing together over 40 years of combined
expertise exclusively dedicated to the boutique and lifestyle space.
Comprised of Joie de Vivre Hotels, Thompson Hotels, Destination Hotels,
tommie and Alila Hotels & Resorts, the company is the leading operator
of independent hotels with more than 85 properties in eight countries
and growing, also boasting an extensive roster of award-winning
restaurants and bars, stunning vacation residences, world-class golf
courses, and indigenous spa and wellness offerings. For more information
on Two Roads Hospitality, visit www.tworoadshotels.com,
follow us on Twitter @TwoRoadsHotels, or like us on Facebook.
FORWARD-LOOKING STATEMENTS
Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
include, but are not limited to, statements related to the Company’s
plans, objectives, goals, expectations, beliefs, business strategies,
future events, business conditions, business trends and expectations
with respect to, among other things, the time schedule to complete the
transaction and certain post-closing matters, the impact of the
transaction on consolidated Adjusted EBITDA and earnings accretion, and
the integration of acquired properties into the World of Hyatt loyalty
program, and involve known and unknown risks that are difficult to
predict. As a result, our actual results, performance or achievements
may differ materially from those expressed or implied by these
forward-looking statements. In some cases, you can identify
forward-looking statements by the use of words such as “may”, “could”,
“expect”, “intend”, “plan”, “seek”, “anticipate”, “believe”, “estimate”,
“predict”, “potential”, “continue”, “likely”, “will”, “would” and
variations of these terms and similar expressions, or the negative of
these terms or similar expressions. Such forward-looking statements are
necessarily based upon estimates and assumptions that, while considered
reasonable by us and our management, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, among others, general economic uncertainty in key
global markets and a worsening of global economic conditions or low
levels of economic growth; the rate and the pace of economic recovery
following economic downturns; levels of spending in business and leisure
segments as well as consumer confidence; declines in occupancy and
average daily rate; limited visibility with respect to future bookings;
loss of key personnel; hostilities, or fear of hostilities, including
future terrorist attacks, that affect travel; travel-related accidents;
natural or man-made disasters such as earthquakes, tsunamis, tornadoes,
hurricanes, floods, wildfires, oil spills, nuclear incidents, and global
outbreaks of pandemics or contagious diseases or fear of such outbreaks;
our ability to successfully achieve certain levels of operating profits
at hotels that have performance guarantees in favor of our third-party
owners; the impact of hotel renovations and redevelopments; risks
associated with our capital allocation plans and common stock repurchase
program and other forms of shareholder capital return, including the
risk that our common stock repurchase program could increase volatility
and fail to enhance stockholder value; our intention to pay a quarterly
cash dividend and the amounts thereof, if any; the seasonal and cyclical
nature of the real estate and hospitality businesses; changes in
distribution arrangements, such as through internet travel
intermediaries; changes in the tastes and preferences of our customers;
relationships with colleagues and labor unions and changes in labor
laws; the financial condition of, and our relationships with,
third-party property owners, franchisees, and hospitality venture
partners; the possible inability of third-party owners, franchisees, or
development partners to access capital necessary to fund current
operations or implement our plans for growth; risks associated with
potential acquisitions and dispositions and the introduction of new
brand concepts; the timing of acquisitions and dispositions; failure to
successfully complete proposed transactions (including the failure to
satisfy closing conditions or obtain required approvals); our ability to
successfully execute on our strategy to reduce our real estate asset
base within targeted timeframes and at expected values; declines in the
value of our real estate assets; unforeseen terminations of our
management or franchise agreements; changes in federal, state, local, or
foreign tax law; the impact of changes in the tax code as a result of
recent U.S. federal income tax reform and uncertainty as to how some of
those changes may be applied; increases in interest rates and operating
costs; foreign exchange rate fluctuations or currency restructurings;
lack of acceptance of new brands or innovation; general volatility of
the capital markets and our ability to access such markets; changes in
the competitive environment in our industry, including as a result of
industry consolidation, and the markets where we operate; our ability to
successfully grow the World of Hyatt loyalty program and the level of
acceptance of the program by our guests; cyber incidents and information
technology failures; outcomes of legal or administrative proceedings;
violations of regulations or laws related to our franchising business;
and other risks discussed in the Company’s filings with the SEC,
including our annual report on Form 10-K, which filings are available
from the SEC. We caution you not to place undue reliance on any
forward-looking statements, which are made only as of the date of this
press release. We do not undertake or assume any obligation to update
publicly any of these forward-looking statements to reflect actual
results, new information or future events, changes in assumptions or
changes in other factors affecting forward-looking statements, except to
the extent required by applicable law. If we update one or more
forward-looking statements, no inference should be drawn that we will
make additional updates with respect to those or other forward-looking
statements.
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Hyatt Media Contact:
Franziska Weber, +1 312-780-6106
franziska.weber@hyatt.com
or
Two
Roads Media Contact:
Karolina Kielbowicz, +1 415-773-1067
kkielbowicz@tworoadshotels.com
or
Hyatt
Investor Contact:
Amanda Bryant, +1 312-780-5539
amanda.bryant@hyatt.com
Source: Hyatt Hotels Corporation