Hyatt Hotels CEO Mark Hoplamazian and Apple Leisure Group Chairman Alex Zozaya (Hyatt, Apple Leisure Group)
Hyatt Hotels is buying Apple Leisure Group, an asset-light resort operator, from two private equity firms, with an eye toward increasing the percentage of revenues and earnings generated from fees.
The hotel operator agreed to buy the company from KKR & Co and KSL Capital Partners for $2.7 billion in cash, Reuters reported. Hyatt expects about $2.2 billion of the purchase to be funded by new debt and $1 billion in cash. The rest, around $500 million, will come from equity financing.
The $1.7 billion in financing will come from JPMorgan. The deal is expected to close by the end of the year and double the resort footprint of the company.
Apple Leisure Group had been under the ownership of KKR and KSL since 2017, when the company was purchased from Bain Capital, another private equity firm, for an unknown price.
Apple Leisure Group’s services include a membership program and technology solutions. But the company is known for resort management. AMResorts manages brands in Mexico, the Caribbean, Europe and Central America.
The company also runs charter flights and offers vacation packages for destinations across the world, with Hyatt Hotels betting on the recovery of the vacation industry.
Hyatt Hotels appears to be attempting to diversify its portfolio as the forecast for hotels remains uncertain. The company committed to selling $1.5 billion in hotel real estate by the end of the year.
[Reuters] — Holden Walter-Warner
