Wyndham Worldwide Corp. plans to beef up its presence in the midscale market by buying La Quinta Holdings Inc.’s hotel franchise and management businesses for $1.95 billion in cash. The acquisition, which involves a fee-for-service business consisting of nearly 900 managed and franchised hotels, is subject to a vote by La Quinta’s shareholders and is expected to close in the second quarter of this year.
“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,” says Stephen Holmes, chairman and ceo of Wyndham Worldwide.
Immediately prior to the sale’s conclusion, La Quinta will spin off its owned real estate assets into a publicly traded real estate investment trust, CorePoint Lodging, whose portfolio will consist of 315 hotels with more than 40,000 rooms throughout the United States.
Wyndham Worldwide’s hotel unit currently consists of about 8,350 hotels and over 720,100 rooms in more than 75 countries under the following brands: The Trademark Hotel Collection, Dolce Hotels and Resorts, Wyndham Grand, Dazzler Hotels, Esplendor Boutique Hotels, Wyndham Hotels & Resorts, Wyndham Garden Hotels, TRYP by Wyndham, Wingate by Wyndham, Hawthorn Suites by Wyndham, Microtel Inn & Suites by Wyndham, Ramada, Baymont Inn & Suites, Days Inn, Super 8, Howard Johnson, AmericInn, Travelodge and Knights Inn. Upon completion of the La Quinta acquisition, that flag “will immediately become one of our flagship brands,” says Geoff Ballotti, president and ceo of Wyndham Hotel Group.
Last year, Wyndham Worldwide said it would spin its business into two publicly traded companies—Wyndham Hotel Group and Wyndham Vacation Ownership. That plan is still on schedule to be completed in this year’s second quarter, the company said as part of the La Quinta announcement.