The sale reflects a blended EBITDA multiple of approximately 16x based on Hyatt’s 2018 pro-forma estimates. Hyatt will continue to manage the three hotels under long-term management agreements. The transaction is expected to close near the end of March 2018.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, ÒThis agreement demonstrates the value of our owned and leased hotels and strengthens our longstanding and valued business relationship with Host. The completion of this transaction not only allows Hyatt to maintain our brand presence in these key markets with great brand representation but also supports the execution of our recently announced initiative to reduce real-estate ownership as part of our broader capital strategy to unlock shareholder value.Ó
Two of the three hotels, Andaz Maui and Grand Hyatt San Francisco, reflect a combined attributed sale value of approximately $800 million and form part of Hyatt’s ongoing $1.5 billion permanent sell-down programs. On a blended basis, the sale of these two properties reflects an EBITDA multiple of approximately 18x based on 2018 pro-forma estimates. The sale of Hyatt Regency Coconut Point for an attributed value of approximately $200 million, at an EBITDA multiple of approximately 12x based on 2018 pro-forma estimates, completes Hyatt’s 2017 commitment to be a Ònet sellerÓ of assets under its ongoing asset recycling program.
Assuming closing in late March, Hyatt anticipates a net reduction in consolidated Adjusted EBITDA of approximately $40 million for the three properties combined over the remainder of 2018.
With the completion of this transaction, Hyatt is increasing its 2018 guidance for return of capital to shareholders to a minimum of $500 million from the previous guidance of at least $300 million. Hyatt intends to provide a full update to the 2018 outlook including the impact of these transactions and the new revenue recognition accounting standard with its first-quarter earnings release in May.
