Marriott International, Inc. (NYSE: MAR) announced today that it has
entered into an agreement with Gaylord Entertainment Company (NYSE: GET)
to acquire the Gaylord brand and hotel management company for $210
million. The transaction is conditioned on Gaylord Entertainment’s
shareholders approving the company’s conversion into a real estate
investment trust. If approved, Gaylord will continue to own the existing
Gaylord hotels and Marriott will assume management of these properties
under long-term agreements.
The transaction would add four hotels to Marriott’s portfolio. Gaylord
Hotels include Gaylord Opryland® in Nashville, Tennessee; Gaylord
Palms® in Kissimmee, Florida near Orlando; Gaylord Texan® on Lake
Grapevine near Dallas, Texas, and Gaylord National® on the Potomac in
National Harbor, Maryland, near Washington, D.C.
Arne Sorenson, Marriott International president and chief executive
officer, said, “We are excited to add Gaylord Hotels to our brand
portfolio and are thrilled Gaylord Entertainment selected us to manage
their properties. We have long been impressed with the hotels Gaylord
has created, as well as their skill in hosting major meetings and events
and attracting the family leisure market. This is a tremendous
opportunity to advance growth and opportunity for both Marriott
International and the Gaylord hotel brand.
“Gaylord properties
will benefit from Marriott’s economies of scale, including lower costs
for central reservations, procurement and other services, plus strong
sales, revenue management, marketing and distribution systems, while
Marriott will be able to capture even a greater share of the major event
market. Gaylord’s “everything-in-one-place” properties are very
attractive to group meeting planners. As a new REIT owner, Gaylord
Entertainment should benefit from improved hotel profitability
associated with Marriott’s ability to generate substantial cost savings
and incremental demand.”
"We chose Marriott – a brand that is a recognized leader in the
hospitality industry - due to their focus on providing the highest
quality experience for both group and leisure customers,” said Colin V.
Reed, Chairman and Chief Executive Officer, Gaylord Entertainment
Company. “According to a recent survey conducted on behalf of Gaylord in
February of over 400 high-quality meeting planners, Gaylord ranked
first in all under one-roof offerings and amenities and Marriott ranked
as the number one preferred group destination provider overall due to
its service standards and wide distribution.”
Upon completion of the transaction, Marriott will operate the hotels
under management agreements with an initial term of 35 years. Marriott
International expects to earn an incentive fee in its first full year of
management, based on improvement in Gaylord Hotels’ profitability, and
further expects the transaction to be accretive to Marriott’s earnings
per share by approximately 2 cents in 2013.
The agreement is subject to the previously mentioned Gaylord
Entertainment shareholder approval, which is expected in August, as well
as lender consent to amendments to Gaylord’s credit facility and other
customary closing conditions and regulatory approvals.
The transaction
is expected to close by October.
Mr. Sorenson will participate in a conference call Gaylord
Entertainment will hold at 10:00 a.m. eastern time today to discuss this
announcement. The call can be accessed at Gaylord Entertainment’s
Investor Relations web site at http://ir.gaylordentertainment.com.
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