Marriott International announced they have reached an agreement with the board of Elegant Hotels Group plc on a recommended all cash offer to acquire Elegant Hotels.
The offer price implies an enterprise value for Elegant of approximately $199.0 million based on Elegant’s total net debt of $68.9 million as of March 31, 2019 as set out in Elegant’s most recent half year report for the six months that ended on March 31, 2019.
“There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category,” said Arne Sorenson, president and CEO, Marriott International in press material. “The addition of the Elegant portfolio will help us further jumpstart our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”
Commenting on the acquisition, Simon Sherwood, non-executive chairman of Elegant said in press material, “The Board of Elegant Hotels is confident in the Group’s long-term prospects but believes that this offer represents compelling value for our shareholders and a great opportunity for our employees to be part of one of the world’s leading hotel companies. The fact that Elegant Hotels has attracted the interest of a company of Marriott’s caliber is a resounding endorsement of the outstanding quality of our properties, operations and people, and indeed of Barbados as a highly desirable destination. We are therefore unanimously recommending the offer to shareholders.”
Following the acquisition, Marriott plans to renovate the hotels in the Elegant portfolio. Upon completion of the planned property renovations, Marriott plans to operate all the Elegant hotels as all-inclusive resorts under one or more of Marriott’s collection brands. In keeping with Marriott’s asset-light strategy, over time, Marriott also intends to market the Elegant hotels for sale subject to long-term management agreements under which Marriott would continue to manage the hotels.
In August, Marriott launched an all-inclusive platform with the goal of growing a worldwide portfolio of resorts in popular vacation segments by leveraging the company’s operational and development expertise, its Marriott Bonvoy travel program with roughly 133 million members, and its iconic hotel brands.
Completion of the transaction is subject to satisfaction or waiver of the offer conditions set out in the offer announcement, including approval by Elegant shareholders.