Playa Resorts to Go Public with $500M Infusion
- Mar 03, 2017
By Gail Kalinoski
Fairfax, Va.—Playa Resorts & Hotels, a leading owner, operator and developer of premier all-inclusive resorts, will be going public soon and have an infusion of $500 million in capital to continue its growth now that shareholders of Pace Holdings Corp. have agreed to allow the two companies to merge. The combined company will keep the Playa name and trade on the NASDAQ as PLYA once the transaction is completed. The firms will have an enterprise value of $1.75 billion.
Pace is a special-purpose acquisition company sponsored by an affiliate of TPG, a Fort Worth, Texas-based private equity firm. Also known as a blank check company, Pace was formed by TPG partner Karl Peterson, who is president and CEO of the firm.
On December 13, Pace entered into a definitive business combination agreement to provide Playa Republic with additional capital and access to public equity markets to further enable its growth. Playa’s management team, led by Chairman & CEO Bruce Wardinski, will continue to run the company after the closing.
“This very successful transaction will be a transformational event for Playa, allowing us to have a greatly improved balance sheet and available capital to accelerate our ability to execute highly accretive investments,” Wardinski said in a prepared statement. “We will now continue in our strategy to add more all-inclusive resorts under the Hyatt Ziva, Hyatt Zilara and Panama Jack brands and to further solidify our leading position in the all-inclusive resorts sector. Being the only publicly traded all-inclusive company gives Playa a unique opportunity to be a consolidator in the segment and drive exceptional growth.”
“Backed by the support of our shareholders, Playa’s transition to a publicly capitalized company will significantly accelerate its innovation and growth.” added Karl Peterson.
Playa owns and operates all-inclusive resorts, offering 6,142 rooms across its 13 locations including the Dominican Republic, Jamaica and Mexico. In 2013, the company entered into a strategic partnership with Hyatt to create two all-inclusive brands, Hyatt Ziva and Hyatt Zilara, of which Playa is the sole franchisee. Through its relationship with Playa, Hyatt is the first major U.S. brand to have entered the all-inclusive segment. Hyatt will sell its preferred stock and keep its common stock, or about 11 percent of the combined company, after the merger is completed this month, Travel Weekly reported.
In January, Playa entered into an agreement with Panama Jack to develop and operate Panama Jack branded resorts. The company’s will rebrand two existing properties – Gran Caribe Resort in Cancun and Gran Porto Resort in Playa del Carmen – with additional resorts in Mexico and the Caribbean to come, according to both parties.
Wardinski told Travel Weekly the planned merger was about growth, estimating the firm would more than double its holdings in five years and possibly add management contracts too.
Peterson along with Tom Klein and Paul Hackwell will join the company’s board of directors. Klein is a veteran of the travel and leisure sector and was most recently president & CEO as well as a member of the board of directors of Sabre Corp. Hackwell leads TPG’s Travel & Leisure group and helps lead the firm’s investments in the Retail group.