Wyndham Worldwide Corporation announced the acquisition of La Quinta's hotel franchise and management businesses for USD 1.95 billion in cash.
The acquisition is expected to close in the second quarter of 2018.
Under the terms of the agreement, stockholders of La Quinta will receive USD 8.40 per share in cash, and Wyndham Worldwide will repay approximately USD 715 million of La Quinta debt net of cash and set aside a reserve of USD 240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta's owned real estate assets into CorePoint Lodging Inc.
With the acquisition of La Quinta's asset-light, fee-for-service business consisting of nearly 900 managed and franchised hotels, Wyndham Hotel Group will span 21 brands and over 9,000 hotels across more than 75 countries.
Wyndham Group aims to expand its presence to reach further into the fast-growing upper-midscale segment, and position itself to be the preferred partner and accommodations provider of developers and guests.
Furthermore, the La Quinta Returns loyalty program with its 13 million enrolled members will be combined with the Wyndham Rewards program, with its 53 million enrolled members.
"This transaction builds on Wyndham Worldwide's proven track record of acquiring companies that are a strong strategic and cultural fit, add highly-regarded brands to our portfolio and offer clear opportunities to drive shareholder value through growth, shared best practices and sharp execution," said Stephen P. Holmes, chairman and chief executive officer of Wyndham Worldwide.
The transaction, which has been approved by the boards of directors of both companies, is expected to close upon the completion of the planned spin-off of La Quinta's owned real estate assets into the separate entity.
Closing is subject to approval by La Quinta stockholders, regulatory and government approval and the satisfaction of other customary closing conditions.
La Quinta also announced that Keith A. Cline has been appointed President and Chief Executive Officer of CorePoint Lodging effective upon completion of the planned spin-off.
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