Wyndham Closes $1.3B Sale of European Vacation Business
- May 14, 2018
Wyndham Worldwide Corp. has wrapped up the disposition of its European vacation rentals business, pocketing a whopping $1.3 billion on the sale to private equity firm Platinum Equity. The new deal comes just a few months after Wyndham closed the $2 billion acquisition of La Quinta Holdings.
Wyndham had announced its decision to explore strategic options for its European vacation rentals business in 2017, and it didn’t take long for the investment community to respond. During the company’s first quarter 2018 earnings conference call on May 2, Chairman & CEO Stephen Holmes said: “We conducted a rigorous strategic review process that generated strong interest from multiple parties, which demonstrated what we already knew: These are great businesses.”
The New Jersey-based company hands over to Platinum Equity a true leadership position, given that the Wyndham European vacations rental concern is the largest manager of holiday rentals in Europe, with more than 110,000 units spanning 25 countries. The properties, located in 600 destinations, operate under 20-plus local brands, including cottages.com, James Villa Holidays, Landal GreenParks, Novasol and Hoseasons.
Despite the change in ownership, the assets will maintain a Wyndham connection, as a 20-year deal was executed calling for the rental business to pay Wyndham a fee of 1 percent of net revenue for the right to use the Wyndham Vacation Rentals brand.
“We are confident that the European vacation rental brands will continue to succeed with the support of Platinum Equity, and we are proud to continue our partnership with these customer-focused brands, underscored by the Wyndham Vacation Rentals endorsement and participation in our award-winning Wyndham Rewards loyalty program,” Holmes said in a prepared statement.
Wyndham plans to apply net proceeds from the sale toward the reduction of existing indebtedness. The company’s long-term debt totaled $3.9 billion at the close of 2017.
Evolution of a company
Wyndham is in transition mode, and the disposition of its European vacation rental business is just one part of the process. In August 2017, the company revealed it would spin off its hotel business, leaving two separate, publicly traded entities.
Recently, the company took a big step toward realizing its evolutionary goal. On May 9, the company revealed that its board of directors has approved the spin-off of the hotel business, which will begin trading as Wyndham Hotels & Resorts, a pure-play hotel franchising and management company on June 1. Additionally, simultaneous with the spin-off, Wyndham Worldwide Corp. will be renamed Wyndham Destinations Inc., and operate as the largest vacation ownership and exchange company in the world.
Images courtesy of Landal GreenParks