Based Wyndham to buy La Quinta hotels for $1.95B

Cornelia Mascio
Gennaio 18, 2018

USA hotel operator Wyndham Worldwide (WYN) announced on Thursday it would acquire La Quinta Holdings' (LQ) franchise and management businesses for $1.95 billion in cash, expanding its reach into the upper-midscale market.

Ahead of the deal, La Quinta will spin-off its owned real estate assets into a publicly traded real estate investment trust, CorePoint Lodging Inc.

"(It) adds a well-performing brand to Wyndham's midscale and upper midscale hotel portfolio two segments that have been growing RevPAR faster than any other segment outside of the economy segment", he said. Wyndham will repay about $715 million of La Quinta debt net of cash.

With the acquisition, Wyndham, whose brands include Howard Johnson, Super 8 and Days Inn, will span 21 brands and more than 9,000 hotels across more than 75 countries.

"This transaction builds on Wyndham Worldwide's proven track record of acquiring companies that are a strong strategic and cultural fit, add highly regarded brands to our portfolio and offer clear opportunities to drive shareholder value through growth, shared best practices and sharp execution", Stephen P. Holmes, chairman and CEO of Wyndham Worldwide, said in a prepared statement.

Geoff Ballotti, president and CEO of Wyndham Hotel Group, said in the statement that after the deal is finalized, La Quinta would "immediately become one of our flagship brands". We expect that La Quinta guests and franchisees will benefit from our intense focus on product quality and our best-in-class technology, digital, loyalty and distribution platforms. "The acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business". Cline was also named president and chief executive of CorePoint Lodging, effective upon the completion of the spin-off.

Wyndham said its planned spinoff of the Wyndham Hotel Group remains on track for the second quarter, as well.

Barclays is Wyndham's financial adviser, while J.P. Morgan advised La Quinta. Barclays and Deutsche Bank are providing committed financing to Wyndham Worldwide in connection with the transaction. J.P. Morgan is providing committed financing to CorePoint Lodging in connection with the transaction.

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