Hyatt to buy Two Roads Hospitality for $ 480m; to establish new lifestyle division

Hyatt has signed an agreement to acquire Two Roads Hospitality, a hotel management company that comprises Joie de Vivre Hotels, Thompson Hotels, Destination Hotels, tommie and Alila Hotels & Resorts brands.

Through the addition of Two Roads, its established lifestyle brands and management agreements for the majority of its 85 properties in eight countries, Hyatt will expand its presence into 23 new markets.

Hyatt Hotels Corporation President and Chief Executive Officer Mark Hoplamazian said, “Combining Two Roads’ meaningful brand presence and development plans in Asia with Hyatt’s already strong position in this region will allow us to accelerate expansion in this critically important and fast-growing part of the world.”

The acquisition consists of a base purchase price of $480 million, with the potential for Hyatt to invest up to an additional $120 million in the aggregate, contingent on the outcome of certain terms to be individually defined after closing.

The base plus contingent total purchase price is expected to reflect an EBITDA multiple of approximately 12-13x stabilised 2021 earnings.

After the close of the transaction, which is expected later this year, Hyatt will create a dedicated lifestyle division as a catalyst to bring together the operations of Two Roads’ and Hyatt’s lifestyle brands.

“Hyatt is an ideal home for us as we share many values and a deep commitment to thoughtful growth and creating compelling experiences for our guests,” said Jamie Sabatier, Chief Executive Officer, Two Roads Hospitality. “Hyatt’s unique position in the marketplace brings with it the powerful benefit of global scale while maintaining meaningful personal relationships with team members, guests and owners.”

Hyatt plans to integrate Two Roads brands into the World of Hyatt program in 2019, expanding opportunities for World of Hyatt members to earn and redeem points.

Hyatt has said it will provide additional information related to the acquisition, including a preliminary estimate of 2019 earnings accretion, on its third quarter earnings call scheduled for 31 October 2018.