NATIONAL REPORT—Today, Wyndham Destinations and vacation rental platform Vacasa have entered into a definitive agreement under which Vacasa will purchase Wyndham Vacation Rentals for approximately $162 million. The transaction is expected to close this fall, subject to customary closing conditions.
The purchase, which is complementary to Vacasa’s current inventory, will boost the company’s portfolio to more than 23,000 homes, spanning North America, Central and South America, Europe, and Africa. Signature Wyndham Vacation Rentals regional and local brands under the new Vacasa umbrella will include Hatteras Realty, ResortQuest, ResortQuest Whistler, Smoky Mountains Property Management, Kaiser Realty, Corolla Classic Vacations, and Vacation Palm Springs.
During their 30 years of combined experience, Wyndham Vacation Rentals and Vacasa developed their multi-destination vacation rental companies with local teams in the communities where they operate. Wyndham Vacation Rentals’ homeowners will continue to benefit from industry-leading dynamic pricing, partnerships with top online travel agencies and preferred regional and local brands, according to the company.
“After conducting a rigorous strategic review process that generated strong interest from multiple parties, we are confident that Vacasa is the ideal buyer,” said Michael D. Brown, president/CEO of Wyndham Destinations. “In the past decade, we grew our vacation rental business to prominent leadership in North America. We determined that selling Wyndham Vacation Rentals is the best option to return value to shareholders and enable the long-term growth of our company through vacation ownership and exchange. We remain so confident in the future of this business and the benefits of a long-term relationship with Vacasa, that we will have an equity interest in Vacasa after the sale.”
In the next 12 months, Vacasa expects to achieve more than $1 billion in gross bookings and an excess of $500 million in net revenue.
“We are excited to partner with the pioneering company in the short-term rental industry that helped make vacation homes popular for so many families around the world,” said Eric Breon, founder/CEO of Vacasa. “Combining Wyndham Vacation Rentals’ decades of operational excellence with Vacasa’s next-generation technology will deliver the industry’s best vacation rental experiences.”
Vacasa will finance the acquisition through a combination of cash and equity. The sale will be comprised of $45 million cash at closing, up to $30 million of Vacasa equity, and the remaining balance in either seller financing or cash at closing. Vacasa expects to complete the full integration with Wyndham Vacation Rentals by fall 2020. PJT Partners acted as financial advisor and Weil, Gotshal & Manges LLP acted as legal advisor to Wyndham Destinations in connection with the transaction. Wilson Sonsini Goodrich & Rosati acted as legal advisor to Vacasa.
Wyndham Destinations Q2 Earnings
In addition, Brown shared that earnings results were positive in the second quarter.
“Today we reported strong quarterly results and increased our guidance for both adjusted diluted earnings per share and adjusted free cash flow. Our initiatives around owner engagement delivered tangible benefits in the quarter as we saw an acceleration of owner arrivals and also an expansion in the growth of our Blue Thread initiatives.”
Among the highlights:
- Net income from continuing operations was $118 million and diluted earnings per share (EPS) from continuing operations was $1.26
- Adjusted net income from continuing operations was $135 million and adjusted diluted EPS from continuing operations was $1.45
- Adjusted EBITDA was $255 million, compared to $249 million in the prior year
- Net revenue of $1,039 million and net VOI sales of $481 million increased 3% and 4%, respectively
“We remain focused on our core business while executing upon our strategic priorities. We have several key initiatives already in place, aimed at optimizing our balance sheet and generating strong free cash flow, which enables us to accelerate share repurchases in order to maximize shareholder value,” said Brown.