Hyatt to acquire Playa Hotels & Resorts for $2.6 billion

CHICAGO - Hyatt Hotels Corporation (NYSE: NYSE:H) has reached an agreement to acquire Playa Hotels & Resorts N.V. (NASDAQ: NASDAQ:PLYA) for $13.50 per share, totaling approximately $2.6 billion, which includes around $900 million of Playa’s debt, net of cash. This deal will allow Hyatt to expand its all-inclusive resort portfolio in Mexico, the Dominican Republic, and Jamaica.

Hyatt’s President and CEO, Mark Hoplamazian, expressed that the acquisition builds on a partnership that began in 2013 with an investment in Playa, which helped launch the Hyatt Ziva and Hyatt Zilara brands. He stated that the transaction would broaden Hyatt’s portfolio and provide more value to stakeholders through an expanded management platform for all-inclusive resorts. The deal comes as Playa demonstrates strong operational performance, with annual revenue of $949.67 million and EBITDA of $235.05 million.

Playa’s portfolio is expected to provide Hyatt with long-term management agreements for its luxury all-inclusive branded properties and expand Hyatt’s distribution channels, including ALG Vacations and Unlimited Vacation Club. Hyatt plans to identify third-party buyers for Playa’s owned properties, aligning with its asset-light business model.

The acquisition is a continuation of Hyatt’s growth in the all-inclusive segment, following the acquisition of Apple (NASDAQ:AAPL) Leisure Group in 2021 and a joint venture with Grupo Piñero in 2024, which added the Bahia Principe Hotels & Resorts portfolio to Hyatt’s Inclusive Collection.

Hyatt intends to fund the acquisition entirely through new debt financing and expects to pay down over 80% of the new debt with proceeds from asset sales, maintaining its investment grade profile. The company anticipates realizing at least $2.0 billion from asset sales by the end of 2027 and projects that asset-light earnings will exceed 90% on a pro forma basis in 2027.

The transaction is subject to customary closing conditions, including Playa shareholder and regulatory approval, and is expected to close later this year. Hyatt’s financial advisors for the transaction include BDT & MSD Partners and Berkadia, with additional advisory from BofA Securities, J.P. Morgan, and Wells Fargo (NYSE:WFC), which have provided fully committed bridge financing. Legal advice is being provided by Latham & Watkins LLP.

This news is based on a press release statement from Hyatt Hotels Corporation.

In other recent news, Playa Hotels & Resorts is in the headlines with multiple developments. Truist Securities has adjusted its stance on the company, downgrading it from Buy to Hold, while maintaining a price target of $13.00. This rating shift comes amid indications of a potential acquisition of Playa by Hyatt. The firm also stated that Playa’s current stock price aligns with its perceived fundamental value.

Simultaneously, Playa has agreed to sell its Jewel Paradise Cove resort for $28.5 million in cash. The transaction is expected to close in the first quarter of 2025, subject to standard closing conditions.

Truist Securities has maintained a Buy rating on Playa, noting the potential for a sale due to ongoing exclusive discussions with Hyatt Hotels. The firm reiterated its belief in the value of Playa’s shares, with a price target of $13.00.

Furthermore, Hyatt Hotels has entered exclusive negotiations with Playa as part of potential strategic options for the resort operator valued at $1.2 billion. The period of exclusive dialogue is set to last until February 3, or until an agreement is reached.

Lastly, Truist Securities has updated its outlook on Playa, raising the price target from $10.00 to $13.00, while reiterating a Buy rating. The adjustment reflects a valuation based on a 10.0x multiple of the company’s expected 2025 EBITDA.

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