Wyndham sells off European vacation rental business
Wyndham Worldwide Corporation has entered into a definitive agreement for the sale of its European vacation rental business to Platinum Equity for approximately $1.3 billion.
In conjunction with the sale, the European vacation rental business has entered into a 20-year agreement under which it will pay a royalty fee of one per cent of net revenue to Wyndham’s hotel business for the right to use the by Wyndham Vacation Rentals endorser brand. The European vacation rentals operations will also participate as a redemption partner in the award-winning Wyndham Rewards loyalty programme.
Wyndham’s industry-leading European vacation rental business is the largest manager of holiday rentals in Europe, with more than 110,000 units in over 600 destinations in more than 25 countries.
The business operates more than two dozen local brands, including cottages.com, James Villa Holidays, Landal GreenParks, Novasol and Hoseasons. It generates approximately $750 million in annual revenue and approximately $130 million of EBITDA (earnings before interest, taxes, depreciation and amortization), including allocated costs.
Wyndham Worldwide originally announced its intent to explore strategic alternatives for its European rental brands in August 2017, in conjunction with the company’s announcement of the planned separation of its hotel business from its vacation ownership and timeshare exchange businesses.
The transaction is expected to close in the second quarter of 2018, subject to customary closing conditions including works council consultation.
Stephen P. Holmes, Wyndham Worldwide’s chairman and CEO, said: “Along with our planned separation and recently announced acquisition of La Quinta’s franchising and management businesses, this is another important step in the evolution of our company.
“Our European vacation rental brands deliver a great consumer experience, have high brand recognition in their markets and have delivered strong, consistent results. Our goal has always been to position them for continued long-term growth.
“We conducted a rigorous strategic review process that generated strong interest from multiple parties, and we were pleased to find the right buyer. We are confident that as part of Platinum Equity’s portfolio, these businesses will have a bright future and will provide significant opportunities for their associates and business partners.”
Platinum Equity is a leading global private equity firm with a highly specialized focus on business operations and more than 20 years’ experience acquiring and operating businesses that have been part of large corporate entities.
Platinum Equity partner Louis Samson said: “We have worked closely with Wyndham Worldwide to craft a divestiture solution that creates value for all sides and puts the European vacation rental business on a path for long-term success as a standalone business.
“We are excited to partner with the management team to ensure a seamless transition while preparing our plans to drive additional growth, both organically and through prospective add-on acquisitions.”
Platinum Equity has been very active in the European M&A market and the firm’s current portfolio companies employ more than 16,000 people in the region. The proposed acquisition of Wyndham’s European vacation rental business represents Platinum Equity’s second European investment since the fourth quarter 2017 when the firm acquired Pattonair.
Wyndham Worldwide estimates that the tax obligations associated with the sale of the European Rental brands will be less than 15% of the proceeds.
The company expects to use the net proceeds from the sale for general corporate purposes, which may include debt repayment and/or funding of its recently announced acquisition of La Quinta Holdings’ hotel franchising and management businesses.
Wyndham Worldwide’s planned spin-off of Wyndham Hotel Group remains on track for an expected distribution in the second quarter of 2018.