Hyatt has signed an agreement to acquire Two
Roads Hospitality, a hotel management company that comprises Joie
de Vivre Hotels, Thompson Hotels, Destination Hotels, tommie and
Alila Hotels & Resorts brands.
Through the addition of Two Roads, its
established lifestyle brands and management agreements for the
majority of its 85 properties in eight countries, Hyatt will
expand its presence into 23 new markets.
Mark Hoplamazian, president and chief
executive officer, Hyatt Hotels Corporation, said, "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.
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 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.
Hyatt has said it will provide additional information
related to the acquisition, including a preliminary estimate of
2019 earnings accretion, on its third quarter earnings call
scheduled for 31 October 2018.