InSight

Exit and Growth Strategies for Middle Market Businesses

Archive for the ‘Hospitality/Leisure’ Category

M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Oct 28, 2019

The report below gives a good overview of the fourth quarter M&A activity in the Hospitality and Leisure Industry Sector. M&A activity for North American based target companies in the Wholesale and Distribution sector for Q3 2019 included 75 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions in the sector was announced in July when Vail Resorts, Inc. acquired Peak Resorts, Inc. for US$167.5 million in cash. Vail Resorts is a holding company that engages in the operation of mountain resorts. Peak Resorts engages in resort operations. It offers activities, services and amenities including skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction and mountain biking. The company was founded in 1997 and is headquartered in Wildwood, MO.

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Jul 31, 2019

The report below gives a good overview of the third quarter M&A activity in the Hospitality and Leisure Industry Sector. M&A activity for North American based target companies in the Hospitality and Leisure sector for Q2 2019 included 66 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when Cedar Fair LP acquired the Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston from Waterpark Management Inc, doing business as Schlitterbahn Waterpark & Resort, for US$261 million in cash, subject to certain working capital adjustments. The transaction increases Cedar Fair’s portfolio expands its footprint in the Texas region and accelerates its growth and profitability. The acquired waterparks generated annual revenues of approximately US$68 million in 2018.

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | May 02, 2019

The report below gives a good overview of the second quarter M&A activity in the Hospitality and Leisure Industry Sector. M&A activity for North American based target companies in the Hospitality and Leisure sector for Q1 2019 included 64 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in January when A private group led by Elliott Management Corp and GFI Capital Resources Group, Inc. acquired Parker Hotel New York for US$420 million in cash. The transaction was funded from bank debt. The transaction would allow GFI Capital Resources Group to enhance its portfolio of hotel businesses.
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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Feb 19, 2019

The report below gives a good overview of the first quarter M&A activity in the Hospitality & Leisure Industry Sector. M&A activity for North American based target companies in the Hospitality and Leisure sector for Q4 2018 included 67 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was closed in December when Pamplona Capital Management LLP, a subsidiary of Pamplona PE Investments Holding Ltd, acquired Latham Pool Products, Inc., a portfolio company of Wynnchurch Capital LLC and Franklin Square Holdings LP, for US$375 million in cash. The acquisition is in line with Pamplona Capital Management’s investment strategy. Following the transaction, Wynnchurch Capital LLC would retain minority stake in Latham Pool Products. Founded in 1956, Latham Pool Products is located in Latham, New York and manufactures inground residential swimming pools and components.

The hospitality sector has benefitted from a strong economy, which has enabled hotels and motels across the globe to continue to increase rate pricing.

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Oct 23, 2018

The report below gives a good overview of the fourth quarter M&A activity in the Hospitality & Leisure Industry Sector.  M&A activity for North American based target companies in the Hospitality and Leisure sector for Q3 2018 included 43 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in August when Xenia Hotels & Resorts Inc acquired the business and assets related to the Ritz-Carlton hotel in Denver from The Ritz-Carlton Hotel Co LLC, a subsidiary of Marriott International Inc for US$100.2 million in cash. Funding for the transaction was provided by Xenia Hotels’ existing cash resources. The acquisition expands Xenia Hotels & Resorts Inc’s hotel management business. The Ritz-Carlton Denver is located in Colorado and owns and operates hotels and resorts.

Both business travel and leisure travel have been on a solid upward trend for decades now. This is driven, in part, by a growing economy and increased efficiencies in booking travel.

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Aug 08, 2018

The report below presents you with a good overview on the third quarter M&A activity in the Hospitality & Leisure Industry Sector.  M&A activity for North American based target companies in the Hospitality and Leisure sector for Q2 2018 included 70 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when a private group led by MLB Advanced Media LP and The Seidler Co LLC, doing business as Seidler Equity Partners acquired Rawlings Sporting Goods Co, Inc., a subsidiary of K2, Inc. and ultimately owned by Newell Brands, Inc. for US$395 million. The acquisition complements MLB Advanced Media LP’s brands in the sports industry and strengthens The Seidler Co’s investment portfolio. Founded in 1887, Rawlings Sporting Goods is located in St. Louis, Missouri and manufactures & markets sports equipment and apparel.

The Restaurant Performance Index (RPI), a monthly composite index that tracks the health of and the outlook for the U.S. restaurant industry, posted a modest decline in Q2. The RPI stood at 101.2 in May, down slightly from April’s level of 101.3. Read more »


M&A Quarterly News In The Hospitality and Leisure Industry Sector

By Robert Decker | May 04, 2018

The report below presents you with a good overview on the second quarter M&A activity in the Hospitality & Leisure Industry Sector. M&A activity for North American based target companies in the Hospitality and Leisure sector for Q1 2018 included 41 closed deals, according to data published by industry data tracker FactSet.

One of the notable transactions of the quarter closed in March when Host Hotels & Resorts LP, a subsidiary of Host Hotels & Resorts, Inc., acquired Andaz Maui at Wailea Resort, Grand Hyatt San Francisco and Hyatt Regency Coconut Point Resort and Spa from Hyatt Hotels Corp for US$1 billion in cash. As part of the agreement, the three acquired hotels would continue to operate under the Hyatt brand and would be operated by Hyatt under a long-term management agreement. The transaction enables Hyatt Hotels Corp to maintain its brand presence in key markets and support the execution of its recently announced initiative to reduce real-estate ownership to unlock shareholder value.

The hospitality sector has been significantly affected by technology when it comes to bookings. This is especially evident in the booking of short-term rentals, but has been prevalent across the board. One of the key areas has been improving guest experiences including speeding up check-in and check-out times.
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M&A Quarterly News In The Hospitality & Leisure Industry Sector

By Robert Decker | Mar 21, 2018

The report below presents you with a good overview on the first quarter M&A activity in the Hospitality & Leisure Industry Sector. M&A activity for North American based target companies in the Hospitality and Leisure sector for Q4 2017 included 61 closed deals, according to data published by industry data tracker FactSet.

One of the most notable transactions of the quarter closed in December when NRD Capital Management, LLC, a private equity firm specializing in investments in middle market, later stage, mature, turnaround and emerging growth companies, acquired Ruby Tuesday, Inc. for US$146.9 million in cash. Under the terms of the agreement, NRD Capital Management would pay US$2.4 in cash for each share of Ruby Tuesday, which represents a 21% premium to Ruby Tuesday’s closing stock price last October 13, 2017.

The hospitality sector is in a stage of flux to some degree as peer-to-peer platforms like Airbnb continue to gain market share.

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A Recent Example of the Strategic Benefits of Merging with a Competitor

By David Sinyard | May 03, 2017

Recently RLJ Lodging Trust (“RLJ”) (NYSE: RLJ) and FelCor Lodging Trust Incorporated (“FelCor”) (NYSE: FCH) announced that they have entered into a definitive merger agreement under which FelCor will merge with and into a wholly-owned subsidiary of RLJ in an all-stock transaction. According to the press release the merger will establish the third biggest pure-play lodging REIT by enterprise value, creating meaningful scale to capitalize on cost efficiencies, negotiate leverage and access to capital, and the opportunity to strategically recycle assets and optimize the portfolio. The combined company will have ownership interests in 160 hotels, including premium branded hotels located primarily in urban and coastal markets with multiple demand generators. The combination also provides significant penetration within key high-growth markets and broad geographic and brand diversity.

Summary of Strategic Benefits (per management):

  • Combination creates the third largest pure-play lodging REIT with a combined enterprise value of $7 billion

    – Increased shareholder liquidity and cost of capital efficiencies
    – Stock transaction allows both sets of shareholders to participate in the upside
    – Enhanced positioning with brands and operators

  • Leading upscale portfolio of compact full-service and premium focused-service hotels generating strong operating margins

    – Combined portfolio will include 160 hotels in 26 states and the District of Columbia, diversified across Marriott, Hilton, Hyatt and Wyndham flags
    – Broad geographic diversity and strengthened presence in key markets such as California, Florida and Boston

  •  Positive financial impact and positioning for future value creation

    – Accretive in first full year
    – Expected cash G&A expense savings of approximately $12 million and approximately $10 million of potential savings from stock-based compensation expense and capitalized cash G&A
    – Opportunity for additional ongoing operating and cash flow improvements through greater purchasing power, market leverage and capital expenditure efficiencies

• Future opportunities to unlock value from portfolio repositioning
• Potential conversion and redevelopment opportunities
• Opportunity to actively refine portfolio
• Strong and flexible balance sheet
• Significant liquidity, minimal near-term maturities and opportunity to lower cost of capital

Mergers such as these are predicated on these Strategic Benefits. The market will measure the success of this transaction in light of whether management ultimately realizes on these listed opportunities.