APPLE LEISURE GROUP acquired by HYATT

Hyatt Hotels agreed on 15 August 2021 to acquire Apple Leisure Group from affiliates of KKR and KSL Capital Partners at an enterprise value of $2.7bn in cash, and completed the transaction on 1 November 2021. The purchase doubled Hyatt’s global resort footprint, made it the largest operator of luxury hotels in Mexico and the Caribbean and extended its European presence by 60% into 11 new markets. The acquired portfolio covered around 100 properties and more than 33,000 rooms in 10 countries, against nine resorts in 2007, with 24 further deals signed. Its membership club counted over 110,000 members. Beyond the resorts themselves, the deal brought Hyatt a holiday package distribution business, destination management services and a technology platform, extending it well beyond hotel operation. It also moved the group further towards fee-based earnings, which it aimed to bring to 80% of the total by the end of 2024. Chief executive Alejandro Reynal and his team stayed at the head of Apple Leisure Group, with Reynal joining Hyatt’s executive leadership team and reporting to chief executive Mark Hoplamazian. Hyatt funded more than 80% of the purchase with $1.0 billion of cash on hand and new debt, and the balance with around $500 million of equity financing, backed by a $1.7 billion commitment from J.P. Morgan. It planned to repay part of that debt with the proceeds of a programme to sell a further $2 billion of hotel real estate by the end of 2024. BDT & Company and J.P. Morgan acted as financial advisers to Hyatt, with Latham & Watkins as legal counsel, while PJT Partners and Deutsche Bank Securities advised Apple Leisure Group and its shareholders, with Simpson Thacher & Bartlett as legal counsel.