Two Roads Hospitality to be Acquired by Hyatt for $480M
Hyatt reports that the acquisition consists of a base purchase price of $480 million, with the potential for Hyatt to invest up to an additional $120 million.
SAN FRANCISCO—Hyatt Hotels has agreed to acquire the Two Roads Hospitality international hotel management firm for $480 million.
The deal between Hyatt and Two Roads Hospitality—which is owned equally by San Francisco-based Geolo Capital and Lowe Hospitality Group of Los Angeles—is expected to close later this year. Under the terms of the transaction, all of Two Roads Hospitality hotel brands—Alila Hotels & Resorts, Destination Hotels, Joie de Vivre Hotels, Thompson Hotels and tommie — will join Hyatt’s global portfolio.
Hyatt will also assume management of Two Road’s stable of properties including: Carmel Valley Ranch, Ventana Big Sur, The Chicago Athletic Association Hotel, Thompson Seattle and The Beekman, A Thompson Hotel in New York.
Hyatt reports that the acquisition consists of a base purchase price of $480 million, with the potential for Hyatt to invest up to an additional $120 million. The base plus contingent total purchase price is expected to reflect an EBITDA multiple of approximately 12-13x stabilized 2021 earnings, which Hyatt considers the best indicator of valuation based on anticipated synergies and growth.
Through the addition of Two Roads, its established lifestyle brands and the management agreements for the majority of its 85 properties in eight countries, Hyatt will expand its brand presence into 23 new markets, the Chicago-based hotelier states. As of June 30, the Hyatt portfolio included more than 750 properties in more than 55 countries across six continents.
After the close of the transaction later this year, Hyatt will create a dedicated lifestyle division to bring together the operations of Two Roads’ and Hyatt’s lifestyle brands.
“The agreement to sell Two Roads Hospitality is a testament to the success of its brands and its remarkable associates and is a truly exciting and meaningful milestone for Geolo,” says John Pritzker, founding partner and director of Geolo Capital. “In the span of nine years, we’ve had the pleasure to build an extraordinary global lifestyle hospitality company.”
Two Roads Hospitality was created in 2016 when Destination Hotels, a wholly owned Lowe subsidiary, merged with Commune Hotels and Resorts, a Geolo-owned company, establishing Two Roads as the largest global collection of lifestyle hospitality brands.
“When Lowe formed Destination Hotels in 1973 there were two properties in its management portfolio,” says Lowe Chairman Robert J. Lowe. “This transaction, 45 years later, demonstrates the strength of the brand built by many outstanding team members who led the company through those decades of growth and success.”
Two Roads currently manages more than 85 properties and over 17,000 rooms across eight countries, representing approximately $2 billion in total property revenues under management, and has a large pipeline of new properties currently under development.
“We could not be more proud and appreciative of the many contributions that each and every one of our team members has made to the success of Destination Hotels and now Two Roads Hospitality,” adds Robert J. Lowe, Jr, co-chairman of Two Roads. “A key aspect of this transaction was our confidence in Hyatt’s capable leadership that shares our commitment to and caring for its people, and having a passion for providing unparalleled guest experiences.”
Geolo, which made its first hotel purchase in 2009 with the acquisition of Carmel Valley Ranch, rapidly grew its portfolio of owned properties and also created Two Roads Hospitality together with Lowe Hospitality Group, Inc. Two Roads has grown to become the leading global hospitality management company with over 85 properties across eight countries, representing $2 billion in total property revenues under management.
While Geolo will no longer be a principal shareholder of Two Roads Hospitality, it will remain the largest owner of hotels managed by Hyatt. Comprised of Joie de Vivre Hotels, Thompson Hotels, Destination Hotels, tommie and Alila Hotels & Resorts, Two Roads Hospitality is the leading global operator of independent, boutique and lifestyle hotels, resorts and vacation residences. The company was created in 2016 when Commune Hotels and Resorts, a Geolo owned company, merged with Destination Hotels, a Lowe Hospitality Group, Inc. company, establishing Two Roads as the largest global collection of lifestyle hospitality brands. Prior to the merger, Geolo had acquired Joie de Vivre in 2010, and then formed Commune Hotels, which subsequently acquired Thompson Hotels in 2013 and Alila Hotels in 2014.
Mark Hoplamazian, president and CEO, Hyatt Hotels Corp. says of the deal, “Two Roads’ passionate team members, strong brands, global footprint and robust development pipeline will expand our lifestyle offerings and grow Hyatt’s brand presence in more places where our guests and World of Hyatt members want to travel. Importantly, 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.”
To date, Geolo, in partnership with Wanxiang America Real Estate, has invested more than $700 million in U.S.-based projects. Additional global real estate investment partners include: Goldman Sachs & Co., Deutsche Bank, J.P. Morgan Asset Management, AJ Capital Partners, Agman Partners, GFI Capital Resources, GreenOak, Heitman, Relevant Group, Market Street Equities, The Berger Company, JW Capital Partners, Touchstone, Magellan Development, Union – Bank AG, Brown Legacy Group and Sterling Bay.