That was quick. Days after Hyatt Hotels Corp. completed the acquisition of Playa Hotels & Resorts, it announced it has entered into a definitive agreement to sell all of Playa’s owned real estate portfolio for $2 billion to Tortuga Resorts, which is a joint venture between an affiliate of KSL Capital Partners and Rodina, a Mexico-based family office.
The portfolio includes 15 all-inclusive resorts across Mexico, the Dominican Republic and Jamaica. Concurrent with the sale, Hyatt and Tortuga will enter into 50-year management agreements for 13 of the 15 properties, with terms consistent with Hyatt’s existing all-inclusive management fee structure. The remaining two properties are under separate contractual arrangements. Hyatt will retain $200 million of preferred equity in connection with the real estate transaction.
Hyatt can achieve up to an additional $143 million earnout if certain operating thresholds are met. The real estate transaction is expected to close before the end of 2025 and is subject to regulatory approval in Mexico and other customary closing conditions.
“The planned real estate sale to Tortuga transforms the acquisition of Playa Hotels & Resorts into a fully asset-light transaction and increases Hyatt’s fee-based earnings,” said Mark Hoplamazian, president and CEO of Hyatt. “Hyatt has secured long-term, durable management agreements and the planned real estate sale demonstrates Hyatt’s commitment to its asset-light business model and ability to deliver value to shareholders that is accretive in the first full year.”
Following the sale of the real estate portfolio, Hyatt’s net purchase price for Playa’s asset-light management business is approximately $555 million, net of gross proceeds from asset sales. Hyatt upon completion of the sale is required to use the proceeds to repay the delayed draw term loan used to fund a portion of the Playa acquisition and expects pro forma net leverage to be consistent with thresholds necessary to maintain its investment-grade credit profile.
In February, Hyatt announced it had entered into an agreement to acquire all outstanding shares of Playa Hotels & Resorts for $13.50 per share, or approximately $2.6 billion, including approximately $900 million of debt, net of cash. The transaction included the acquisition of 15 all-inclusive resorts previously managed and owned by Playa. Of these, eight were already represented within Hyatt’s system as Hyatt Ziva and Hyatt Zilara properties.
At the time of the acquisition, Hoplamazian called Hyatt a “firmly established itself in the all-inclusive space, a journey that began in 2013 through an investment in Playa Hotels & Resorts that launched the Hyatt Ziva and Hyatt Zilara brands.” It’s part of a broader strategy to expand in the resort space. In 2021, Hyatt acquired Apple Leisure Group and earlier this year it finalized a 50/50 joint venture with Grupo Piñero to bring Bahia Principe Hotels & Resorts into its Inclusive Collection. With the addition of Playa’s properties, Hyatt’s all-inclusive portfolio now spans approximately 55,000 rooms across Latin America, the Caribbean and Europe.
BDT & MSD Partners is acting as lead financial advisor to Hyatt on the transaction, with Berkadia serving as Hyatt’s real estate advisor. Latham & Watkins LLP is Hyatt’s legal advisor. Goldman Sachs & Co. LLC is acting as exclusive financial advisor to Tortuga, and Simpson Thacher & Bartlett LLP is acting as Tortuga’s legal advisor.
