PARSIPPANY, NJ—Wyndham Worldwide Corporation has entered into a definitive agreement for the sale of its European vacation rental business to Platinum Equity for approximately $1.3 billion.
In conjunction with the sale, the European vacation rental business has entered into a 20-year agreement under which it will pay a royalty fee of 1% of net revenue to Wyndham’s hotel business for the right to use the “by Wyndham Vacation Rentals” endorser brand. The European vacation rentals operations will also participate as a redemption partner in the Wyndham Rewards loyalty program.
Wyndham Worldwide originally announced its intent to explore strategic alternatives for its European rental brands in August 2017, in conjunction with the company’s announcement of the planned separation of its hotel business from its vacation ownership and timeshare exchange businesses. The transaction is expected to close in the second quarter of 2018, subject to customary closing conditions, including works council consultation.
Wyndham Worldwide estimates that the tax obligations associated with the sale of the European Rental brands will be less than 15% of the proceeds. The company expects to use the net proceeds from the sale for general corporate purposes, which may include debt repayment and/or funding of its recently announced acquisition of La Quinta Holdings’ hotel franchising and management businesses. Wyndham Worldwide’s planned spin-off of Wyndham Hotel Group remains on track for an expected distribution in the second quarter of 2018.
“Along with our planned separation and recently announced acquisition of La Quinta’s franchising and management businesses, this is another important step in the evolution of our company,” said Stephen P. Holmes, chairman and CEO of Wyndham Worldwide. “Our European vacation rental brands deliver a great consumer experience, have high brand recognition in their markets and have delivered strong, consistent results. Our goal has always been to position them for continued long-term growth. We conducted a rigorous strategic review process that generated strong interest from multiple parties, and we were pleased to find the right buyer. We are confident that as part of Platinum Equity’s portfolio, these businesses will have a bright future and will provide significant opportunities for their associates and business partners.”