Hyatt enters definitive agreement to acquire Apple Leisure Group

KUALA LUMPUR, Aug 16 -- Hyatt Hotels Corporation has announced that Hyatt has entered into a definitive agreement to acquire Apple Leisure Group (ALG), a leading luxury resort-management services, travel and hospitality group, from affiliates of each of KKR and KSL Capital Partners LLC for US$2.7 billion in cash. (US$1 = RM4.241)

The transaction is anticipated to close in the fourth quarter of 2021, subject to customary closing conditions, according to a statement.

ALG’s resort brand management platform AMResorts® provides management services to the largest portfolio of luxury all-inclusive resorts in the Americas under the AMR™ Collection brand portfolio.

The acquisition also includes ALG’s membership offering, Unlimited Vacation Club®, travel distribution business ALG Vacations®, as well as destination management services and travel technology assets.

Following completion of the transaction, ALG’s business will continue to be led by current ALG Chief Executive Officer (CEO) Alejandro Reynal and the current ALG leadership team. Reynal will become a member of Hyatt’s executive leadership team and report to Hyatt CEO Mark Hoplamazian.

Hoplamazian, who is also Hyatt president, said: “The addition of ALG’s properties will immediately double Hyatt’s global resorts footprint.”

“ALG’s portfolio of luxury brands, leadership in the all-inclusive segment and large pipeline of new resorts will extend our reach in existing and new markets, including in Europe, and further accelerate our industry-leading net rooms growth.

“Importantly, the combination of this value-creating acquisition and the US$2 billion increase in our asset sale commitment will transform our earnings profile, and we expect Hyatt to reach 80 per cent fee-based earnings by the end of 2024.”

ALG’s hotel portfolio consists of over 33,000 rooms operating in 10 countries. The portfolio has grown from nine resorts in 2007, to approximately 100 properties by 2021-end and has a pipeline of 24 executed deals with a large number of additional hotels in the development process.

At closing, Hyatt expects to fund more than 80 per cent of the purchase with a combination of US$1.0 billion of cash on hand and new debt financings, and the remainder with approximately US$500 million from equity financing.

Hyatt has secured a US$1.7 billion financing commitment from J.P. Morgan. Cash proceeds from the US$2 billion asset sale programme are expected to be used to pay down debt, including debt incurred to fund the acquisition.

More details at www.hyatt.com.

-- BERNAMA