Wyndham Worldwide to Purchase La Quinta’s Franchise and Management Businesses after Spin-Off of La Quinta’s Real Estate Assets into CorePoint Lodging Inc.
High-Quality, Midscale Brand Expands Wyndham Hotel Group’s System to Over 9,000 Hotels
PARSIPPANY, N.J. and IRVING, Texas, Jan. 18, 2018 /PRNewswire/ — Wyndham Worldwide Corporation (WYN) and La Quinta Holdings Inc. (LQ) announced today that they have entered into a definitive agreement under which Wyndham Worldwide will acquire La Quinta’s hotel franchise and hotel management businesses for $1.95 billion in cash. The acquisition is expected to close in the second quarter of 2018.
Under the terms of the agreement, stockholders of La Quinta will receive $8.40 per share in cash (approximately $1.0 billion in aggregate), and Wyndham Worldwide will repay approximately $715 million of La Quinta debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta’s owned real estate assets into CorePoint Lodging Inc. Immediately prior to the sale of La Quinta to Wyndham Worldwide, La Quinta will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging.
Wyndham’s Hotel Group is the world’s largest and most diverse hotel business based on number of properties. With the acquisition of La Quinta’s asset-light, fee-for-service business consisting of nearly 900 managed and franchised hotels, Wyndham Hotel Group will span 21 brands and over 9,000 hotels across more than 75 countries.
The addition of La Quinta, one of the largest midscale brands in the industry, will build upon Wyndham Hotel Group’s strong midscale presence, expand its reach further into the fast-growing upper-midscale segment, and position Wyndham Hotel Group to be the preferred partner and accommodations provider of developers and guests. The La Quinta Returns® loyalty program, with its 13 million enrolled members, will be combined with the award-winning Wyndham Rewards® program, with its 53 million enrolled members.
Stephen P. Holmes, Chairman and Chief Executive Officer of Wyndham Worldwide, said, “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.”
“La Quinta will immediately become one of our flagship brands,” said Geoff Ballotti, President and Chief Executive Officer of Wyndham Hotel Group. “It is an exceptionally strong brand that is led by service-minded associates who deliver some of the highest customer engagement levels in our industry. 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. This acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business.”
Keith Cline, President and Chief Executive Officer of La Quinta, added, “As we anticipated, the separation of our businesses is enabling greater strategic clarity and allowing our company to take advantage of growth opportunities that naturally flow from each business model. To that end, we are excited to announce the addition of the La Quinta franchise and management businesses to Wyndham Hotel Group’s portfolio. We believe that, under the management of Wyndham’s seasoned team of executives, the La Quinta portfolio will grow and thrive, yielding long-term benefits to the stakeholders of both companies.”