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Wyndham Worldwide announces plan to become two publicly traded hospitality companies

RDO / Industry Updates  / Wyndham Worldwide announces plan to become two publicly traded hospitality companies
Wyndham Worldwide
3 Aug

Wyndham Worldwide announces plan to become two publicly traded hospitality companies

Wyndham Worldwide has announced plans to spin off the company’s hotel business resulting in two separate, publicly traded companies. Wyndham Hotel Group will become a new, publicly traded pure-play hotel company with a portfolio of renowned brands. Wyndham Vacation Ownership will be the world’s largest publicly traded timeshare company and will be joined with Wyndham Destination Network, home to RCI. The Company will also explore strategic alternatives for its European rental brands.

The two public companies intend to enter into long-term exclusive license agreements to retain their affiliation with one of the industry’s top rated loyalty programs, Wyndham Rewards, as well as continued collaboration on key inventory sharing and customer cross-sell initiatives. The corporate names of the post-spin public companies have not yet been decided.

The transaction is expected to increase the fit and focus and strategic flexibility of the two post-spin companies, allow each company to maintain a sharper focus on its core business and growth opportunities, facilitate future capital raising as needed for the two companies, and position each to be better able to make the changes necessary to respond to developments in its markets. Following the planned separation, both companies will have significant scale and leadership positions within their industries, strong cash flows, rich portfolios of trusted brands, and the existing relationships in place to drive attractive growth and shareholder value.

The transaction, which is expected to be tax-free to Wyndham Worldwide and its shareholders, will be effected through a pro rata distribution of the new hotel company’s stock to existing Wyndham Worldwide shareholders. Wyndham Worldwide expects the transaction to be completed in the first half of 2018.

Management

As two separate public companies, the vacation ownership company and the hotel company will have separate boards of directors. Holmes will serve as Non-Executive Chairman of the Board of Directors for both companies.

Geoff Ballotti, current CEO of Wyndham Hotel Group, will continue to lead the hotel company as President and CEO.

Michael Brown, current CEO of Wyndham Vacation Ownership, will continue to lead the timeshare company as President and CEO

Gail Mandel, CEO of Wyndham Destination Network, will continue to lead that business through this transition, and Tom Conforti, CFO of Wyndham Worldwide, will move into an advisory role, working with the Company through the transaction.

David Wyshner will assume the role of Wyndham Worldwide CFO and will become CFO of the hotel company upon spin.

Michael Hug will serve as CFO of the timeshare company.

Hotel company

Wyndham Hotel Group is one of the world’s largest and most diverse hotel businesses, with a global portfolio of 18 brands and over 8,100 hotels – more than any other company in the world – with approximately 705,700 rooms in over 80 countries and 2016 revenues of $1.3 billion.

The pure-play, publicly traded hotel company is expected to have:

  • A strong and resilient, fee-for-service, global franchise model
  • High margins
  • Significant free cash flow
  • A growing pipeline of 150,800 rooms
  • A proven and experienced management team

Vacation ownership company

With over $2 billion in gross timeshare sales in 2016, Wyndham Vacation Ownership is the world’s largest developer and marketer of vacation ownership products. Wyndham Vacation Ownership develops and operates a portfolio of over 220 resorts throughout the United States, Canada, Mexico, the Caribbean, South America and the South Pacific, managing vacation ownership sales, marketing, consumer financing operations and property management.

RCI is the world’s first and largest vacation exchange network, which introduced trading flexibility to vacation ownership more than 40 years ago. With over 4,300 affiliated properties in more than 100 countries, RCI members can choose from a variety of accommodations and vacation experiences.

The post-spin, publicly traded timeshare company is expected to have:

  • Unprecedented scale as the largest timeshare company in the world with a strong sales and marketing platform
  • The largest timeshare exchange network
  • Significant free cash flow
  • A diversified timeshare business model
  • A proven and experienced management team

“By joining the largest timeshare company in the world with the largest timeshare exchange network and connecting them seamlessly to the Wyndham Rewards platform, we will be positioned to provide the widest variety of vacation opportunities to our owner base and network affiliates,” said Michael Brown, CEO of Wyndham Vacation Ownership. “We will focus on building on our proven strengths and unmatched scale to meet evolving consumer vacation needs while continuing to drive value for shareholders.”

For more information, go to: http://investor.wyndhamworldwide.com/phoenix.zhtml?c=200690&p=irol-newsArticle&ID=2291276

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