Hyatt to Buy Two Roads Hospitality for US$480 Million

TWO Roads Hospitality’s boutique and lifestyle brands include Alila, Destination, Joie de Vivre, Thompson, and Tommie. The company was formed in September 2016 when Destination Hotels and Resorts merged with Commune Hotels + Resorts.

The addition of Two Roads to the Hyatt portfolio will add 85 properties to Hyatt’s existing portfolio of 750 hotels, and expand Hyatt’s footprint in 23 new markets, especially within Asia. The deal, which is expected to close by the end of this year, may also include the possibility for Hyatt to invest an additional US$120 million, based on the outcome of certain terms that will be defined after deal closes.

Hyatt said the total purchase price of approximately US$600 million (base price plus contingent price) is expected to reflect an earnings before interest, tax, depreciation and amortization multiple of approximately 12 to 13 times stabilized 2021 earnings. After the deal closes, Hyatt expects to combine Two Roads’ and its own lifestyle brands into a dedicated lifestyle division.

Hyatt Hotels has been on a particularly acquisitive streak over the past year, although most of its most recent investments have been in “adjacent spaces” such as wellness, beginning with the January 2017 acquisition of the Miraval Group.

Prior to that, in 2015, Hyatt was a leading bidder for Starwood Hotels & Resorts, which was eventually sold to Marriott International in 2016. Hyatt’s desire for scale is motivated by the increasing consolidation taking place within the hospitality industry, and the fact that the company is relatively smaller than its other U.S. competitors which include Marriott International, which has 6,700 hotels, and Hilton, which has 5,400 hotels.

With the inclusion of Two Roads Hospitality’s brands and properties, Hyatt will grow from 750 hotels worldwide to a total of 835 properties. Adding more of Two Roads’ lifestyle brands to Hyatt’s portfolio not only gives the company more scale but also complements its acquisitions in the wellness space and its efforts to appeal to high-end travelers. [sources/photo special]