US hotel operator Hyatt Hotels Corp has said that it has entered a deal to purchase resort company Apple Leisure Group from its private equity owner KKR & Co and travel and leisure specialist KSL Capital Partners for $2.7 billion in cash.
Purchased From Bain Capital
In 2017, KKR and KSL bought the Pennsylvania-based resort operator from Bain Capital for an undisclosed price.
Percentage Of Revenues And Earnings Generated From Fees To Increase
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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.
Sales Of Hotel Real Estate
The hotel operator said that 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 that 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 approximately $500 million from equity financing. It added that Hyatt has secured a $1.7 billion financing commitment from JP Morgan.
Cash Proceeds Use
Cash proceeds from the $2 billion asset sale programme 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.
Global Resort Footprint To Double
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.