Hyatt To Buy Dream Hotel Group's Lifestyle Hotel Brand, Platform For At Least $125 Mln

(RTTNews) - Hyatt Hotels Corporation (H) and Dream Hotel Group said on Friday announced a deal for a Hyatt affiliate to buy Dream Hotel Group's lifestyle hotel brand and management platform, for a base price of $125 million. The transaction is expected to be closed in the coming months.

In addition to the base purchase price, Hyatt will pay with up to an additional $175 million over the next six years as properties come into the pipeline and open.

Stabilized management fees associated with the base purchase price of $125 million are anticipated to be approximately $12 million and, to the extent the contingent purchase price of $175 million is paid, additional stabilized management fees are anticipated to be up to around $27 million.

"The total base purchase price plus the contingent purchase price represents an attractive acquisition multiple in the high-single digits on projected stabilized earnings," Hyatt said in a statement. The acquisition includes the Dream Hotels, The Chatwal Hotels and Unscripted Hotels brands, with properties in some of the hotel markets across the Americas, Europe, and Asia.

This asset-light acquisition will include a portfolio of 12 managed or franchised lifestyle hotels, with another 24 signed long-term management agreements for hotels expected to open in the future.

Upon closing, the transaction will add over 1,700 rooms to Hyatt's lifestyle portfolio and increase Hyatt's room count in New York City by more than 30%.

The acquisition will extend Hyatt's brand footprint in key markets, including Nashville, Hollywood, South Beach, Durham, several locations in New York City and one in the Catskills.

Signed contracts represent additional strategic destinations including Las Vegas, Saint Lucia, and Doha.