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La Quinta Selling Operating Business to Wyndham Worldwide After Spinoff of Real Estate

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La Quinta Selling Operating Business to Wyndham Worldwide After Spinoff of Real Estate



After announcing plans a year ago to split its hotel business into separate firms, Blackstone-controlled La Quinta Holdings Inc. (NYSE: LQ) reached a deal this week to sell its hotel franchise and management businesses to Wyndham Worldwide Corp. (NYSE: WYN) for $1.95 billion.

As part of the agreement, immediately prior to the sale La Quinta will spin off its owned real estate assets into a publicly-traded REIT to be called CorePoint Lodging. The company’s owned and franchised portfolio currently consists of more than 880 hotel properties with about 87,500 rooms in 48 U.S. states, Canada, Mexico and Honduras.

Wyndham hopes the addition of La Quinta will expand its reach further into the fast-growing upper-midscale hotel segment.

Wyndham’s Hotel Group is one of 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.

“La Quinta will immediately become one of our flagship brands,” said Geoff Ballotti, president and CEO 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.”

Keith Cline, president and CEO of La Quinta, will serve in the same role at CorePoint Lodging.

“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,” Cline said. “The midscale and upper midscale segments are among the largest in the lodging industry in terms of number of properties and developers – not surprising given the cash-on-cash returns. As a pure-play lodging real estate company with a portfolio focused in these highly desirable segments, there is a significant opportunity to drive value for CorePoint.”

Barclays is acting as exclusive financial advisor and Kirkland & Ellis LLP is acting as legal advisor to Wyndham Worldwide. Barclays and Deutsche Bank are providing committed financing to Wyndham Worldwide in connection with the transaction.

J.P. Morgan is acting as exclusive financial advisor and Simpson Thacher & Bartlett LLP is acting as legal advisor to La Quinta. J.P. Morgan is providing committed financing to CorePoint Lodging in connection with the transaction.


Source: La Quinta Selling Operating Business to Wyndham Worldwide After Spinoff of Real Estate

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