NEW YORK ( The Deal) -- Lodging company Wyndham Worldwide Corp. said Friday it acquired Shell Vacations LLC in a $255 million cash-and-assumed-debt deal that would add 19 resorts to its portfolio of properties under management.
Terms of the deal call for Wyndham, through an affiliate, to pay $102 million in cash for Shell and assume $153 million of debt. Northbrook, Ill.-based Shell is a timeshare operator with resort locations in eight U.S. states and in Canada, boasting about 115,000 members.
Shell traces its history back to 1978, originally entering the timeshare business with the Vistana Resort in Orlando, Fla.
As part of the deal, Wyndham Vacation Ownership will assume property management operations at Shell resorts, take over operations of Shell's vacations club reservation and member benefit systems, and assume all Shell marketing and sales activities.Parsippany, N.J.-based Wyndham, which owns or operates more than 7,000 hotels worldwide, said that the deal would be a nice complement to its timeshare operation. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests for 813,000 members at 160 resorts spread across North America, the Caribbean and the South Pacific. "With a history that spans more than four decades, Shell Vacations is both a pioneer and a respected leader within the hospitality industry," Wyndham Vacation Ownership CEO Franz S. Hanning said in a statement. "We look forward to building upon Shell's achievements and continuing the growth of its highly successful vacation club by pursuing the same formula of providing outstanding quality, value and customer care." Wyndham CEO Stephen P. Holmes said the purchase would contribute immediately to earnings and generate "meaningful" cash flow, saying "with strong fee-for-service revenues, this acquisition is consistent with our capital-light strategy." The deal continues Wyndham's steady flow of bolt-on acquisitions. The company last year bought Resort Co. LLC from Tonka Bay Equity Partners for an undisclosed sum, and in 2010 added James Villa Holidays for $77 million, ResortQuest for $56 million and the Tryp hotel brand for $43 million. A Kirkland & Ellis LLP team led by William Sorabella and Stefanie Wool advised Wyndham on the Shell deal. A Weil, Gotshal & Manges LLP team led by Douglas Warner and Philip Rosen advised Shell.