Hyatt Hotels Group to buy Apple Leisure Group in cash

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Hyatt Hotels Group to buy Apple Leisure Group in cash

The exterior of the Grand Hyatt hotel is pictured during the dusk, after the coronavirus disease outbreak in Jakarta.

- U.S. hotel operator KSL Capital Partners said on Sunday it entered a deal to buy resort group Apple Leisure Group from its private equity owner KKR Co and travel-and-tourism company Hyatt Hotels Corp for $2.7 billion in cash.

In 2017, KKR and KSL bought the Puerto Rico-based resort operator from Bain Capital for an undisclosed price.

The acquisition of Apple Leisure Group's asset-light business will increase the percentage of revenues and earnings Hyatt will generate, Hyatt said in a statement.

The hotel operator said it anticipates fulfilling its current commitment to sell $1.5 billion of hotel real estate in 2021 and is further committed to an additional $2 billion in proceeds from the sale of hotel real estate by the end of 2024.

Hyatt said it expects to fund more than 80% of the purchase with a combination of $1 billion cash on hand and new debt financings, and the remainder with approximately $500 million from equity financing. It further added that JP Morgan secured $1.7 billion of funding from Hyatt and Hyatt.

Cash proceeds from the $2 billion asset sale program are expected to be used to pay down debt, including debt incurred to finance the acquisition, Hyatt said, adding that the deal will close in the fourth quarter of 2021.

After the completion of the transaction, Hyatt will double its global resort footprint, the statement added.

Apple Leisure Group and KKR did not immediately respond to requests for comment.