Hyatt to buy Apple Leisure Group from KKR, KSL Capital for $2.7 billion

The exterior of the Grand Hyatt hotel is pictured during the dusk, following the coronavirus disease (COVID-19) outbreak, in Jakarta, Indonesia, June 25, 2020. Picture taken June 25, 2020. REUTERS/Willy Kurniawan

Aug 15 (Reuters) – U.S. hotel operator Hyatt Hotels Corp (H.N) said on Sunday it entered a  deal to buy resort company Apple Leisure Group from its private-equity owner KKR & Co (KKR.N) and travel-and-leisure specialist KSL Capital Partners for $2.7 billion in cash.

In 2017, KKR and KSL bought the Pennsylvania-based resort operator from Bain Capital for an undisclosed price.

The acquisition of Apple Leisure Group’s asset-light business will increase the percentage of revenues and earnings Hyatt will generate from fees, Hyatt said in a statement.

The hotel operator said it anticipates  fulfilling  its  current  commitment to sell  $1.5 billion  of hotel real estate in  2021 and is further committing to an  additional  $2 billion  in proceeds from the sale of hotel real estate by the end of 2024. 

Hyatt said it expects to fund more than 80% of the purchase with a combination of $1 billion of cash on hand and new debt financings, and the remainder with about $500 million from equity financing. It added that Hyatt has secured a $1.7 billion financing commitment from JP Morgan (JPM.N)

Cash proceeds from the $2 billion asset sale program are expected to be used to pay down debt, including debt incurred to fund the acquisition, Hyatt said, adding that the deal is anticipated to close in the fourth quarter of 2021.

After the completion of the deal, Hyatt will double its global resort footprint, the statement added.

Apple Leisure Group and KKR did not immediately respond to a request for comment.

Reporting by Akriti Sharma and Kanishka Singh in Bengaluru
Editing by Chizu Nomiyama and Diane Craft

Our Standards: The Thomson Reuters Trust Principles.

Source link

What do you think?


Leave a Reply

Your email address will not be published. Required fields are marked *

Not a Model Y. Source: Twitter

Musk’s message of hope as Tesla gears up to make EVs near Berlin

The social media trap – Mid-Day