Hyatt Corp To Acquire Apple Leisure Group From KKR and KSL JV for $2.7bn
Main Photo: The Secrets Resort, Lanzarote
Date: August 2021
Name: Apple Leisure Group
Location: Mostly across North America and the Caribbean
Number of Keys: 33,000
Seller: KKR, the US-listed private equity group, and KSL Capital Partners, the US-based private equity group.
Buyer: Hyatt Corp, announced that it agreed to acquire Apple Leisure Group, the US-based luxury resort management services and hospitality group for US$2.7 billion in cash.
According to the announcement, Hyatt expects to fund over 80% of the transaction with a combination of US$1.0 billion of cash and new debt financings, and the balance with an approx. US$500 million equity financing.
Additionally, proceeds from Hyatt’s US$2 billion asset sale program are expected to be used to pay down the company’s debt, including debt incurred in connection with the Apple Leisure Group acquisition.
Apple Leisure Group comprises AM Resorts, a luxury leisure resort company. Founded in 2001, the company has six brands, such as Secrets, Dreams, Breathless, Zoetry, Alua and Sunscape with resorts across Mexico, the Caribbean, Central America and Europe.
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 the completion of the transaction, ALG’s business will continue to be led by current ALG CEO Alejandro Reynal and the current ALG leadership team. Mr. Reynal will become a member of Hyatt’s executive leadership team and report to Hyatt CEO Mark Hoplamazian.
“With the asset-light acquisition of Apple Leisure Group, we are thrilled to bring a highly desirable independent resort management platform into the Hyatt family,” said Mark Hoplamazian, president and chief executive officer, Hyatt.
“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 $2 billion increase in our asset sale commitment will transform our earnings profile, and we expect Hyatt to reach 80% 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 the end of 2021 and has a pipeline of 24 executed deals with a large number of additional hotels in the development process.
“Combining Hyatt’s deep expertise and global brand footprint with ALG’s strong resort brands, operating capabilities and robust development plans will elevate our differentiated position and create a leader in luxury leisure travel,” said Alejandro Reynal, chief executive officer, Apple Leisure Group. “On behalf of everyone at ALG, I am grateful to our partners at KKR and KSL who supported us in building the platform into what it is today. I am excited to have our team join the Hyatt family and I anticipate a robust growth journey ahead as the industry expands and we are able to provide a best-in-class leisure offering to an even larger group of travellers around the world.”
“Today is a great milestone in what has been a story of growth, resilience, and dedication to world-class leisure experiences by an outstanding team at Apple Leisure Group,” said Chris Harrington and Rich Weissman, partners at KKR and KSL Capital Partners, respectively. “There is simply no better home for ALG to continue on its growth trajectory than being part of Hyatt.”
Price: US$2.7bn
Price per Key: $81,818
THPT Comment: Wow, some deal, taking Hyatt truly into the vacation resort business, not just in North America, but also in Europe.
First Seen: ALG press release
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