Marriott Vacations Worldwide Corp. is acquiring ILG Inc., one of its main competitors, for about $4.7B. Under the terms of the deal, ILG shareholders will receive $14.75 in cash and 0.165 shares of MVW common stock for each ILG share.
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ILG, a timeshare specialist, has more than 40 properties and over 250,000 owners in its Vistana Signature Experiences and Hyatt Vacation Ownership portfolios, as well as exchange networks that comprise nearly 2 million members and over 3,200 resorts worldwide. MVW, for its part, has 65 properties in its portfolio, with about 400,000 owners.
The combined entity will offer a sizable array of upper-upscale and luxury brands for timeshare vacation resorts, Marriott said in a statement.
According to Marriott Vacations Worldwide CEO Stephen Weisz, who spoke Monday morning during a conference call, the new entity will be more diversified and "will significantly enhance marketing potential and scale to drive sales growth."
"Through ILG's relationship with Hyatt, we will also have the rights to develop, market and sell under the Hyatt Vacation Ownership programs," Weisz said. "ILG's exchange networks and management services will also provide MVW with incremental, stable and high-margin revenue streams, which will diversify our financial profile."
The deal represents a premium of about 13% over the companies' share prices on Friday. Weisz said the deal is expected to result in annual savings for the combined entity of $75M by the second year.
MVW has received financing commitments from J.P. Morgan and BofA Merrill Lynch, so the completion of the deal isn't subject to financing.
After the deal closes, the company will be the global licensee of seven upper-upscale and luxury vacation brands, including Marriott Vacation Club, Grand Residences by Marriott, Ritz-Carlton Destination Club, Sheraton Vacation Club, Westin Vacation Club, St. Regis Residence Club and Hyatt Residence Club.
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