MIAMI & STAMFORD, Conn.--Interval Leisure Group (Nasdaq:IILG) (“ILG”), and Starwood Hotels and Resorts Worldwide, Inc. (NYSE:HOT) (“Starwood”) today announced that the Boards of Directors of both companies have unanimously approved a definitive agreement under which a wholly owned subsidiary of ILG will acquire and then merge with and into Vistana Signature Experiences (“Vistana”). The combination, which will follow completion of the planned spin-off of Vistana from Starwood announced on February 10, 2015, has a total value to Starwood of approximately $1.5 billion.
Vistana is a leading developer marketer and manager of 22 high-end vacation ownership resorts with more than 220,000 owners and a world-class team of more than 5,000 associates. As a result of this merger, the combined company will have a more diverse portfolio and a strengthened position as a leader in the vacation ownership industry with an expansive portfolio of approximately 200 managed resorts encompassing over 500,000 owners. The merger will bolster ILG’s vacation ownership portfolio by adding worldwide exclusive rights to use the Sheraton® and Westin® brands in vacation ownership, while allowing Sheraton Vacation Club and Westin Vacation Club owners to continue enjoying access to the Starwood Preferred Guest (SPG) program. In addition, ILG provides memberships to nearly two million consumer families through Interval International, one of its major operating businesses. The combined company will have the scale, global reach, assets, inventory, and sales and marketing infrastructure to support increased growth. It will also have an enhanced financial profile, with a strong balance sheet and substantial free cash flow from recurring fee-for-service revenues to drive sales and earnings growth.
“This transformational transaction creates significant value for the shareholders of both companies and positions us at the forefront of a rapidly evolving industry,” said Craig Nash, Chairman, President and CEO of ILG. “By bringing together ILG and Vistana, two companies with long histories of hospitality brand stewardship and leadership, we are creating a company with strong positions from which to offer highly attractive and complementary product offerings. We will continue to grow our full suite of brands, including Hyatt Residence Club, Sheraton Vacation Club and Westin Vacation Club, and the combined company will maintain an enhanced portfolio of properties, services and expertise to provide guests with the top, high-quality vacation ownership brands and best vacation experiences in the industry. In addition, with an even more diverse offering of leading properties and broader geographic reach and scale, ILG will strengthen its competitive position and ability to capitalize on revenue and profit growth opportunities over time. This combination further reinforces ILG’s balance sheet and conservative leverage profile so we may continue to prudently grow the business.”
Mr. Nash added, “We have a 15-year history of working with Vistana, and we look forward to continuing to collaborate with Vistana’s talented and experienced management team and associates as we seamlessly integrate our two companies.”
"We are delighted with this transaction and we have great respect for Craig, the ILG team and the company’s culture. We believe that this combination will create more value for our shareholders than a standalone path. Not only are the economics better, but being part of a larger organization ensures more growth opportunities for the business and our associates,” said Adam Aron, Starwood’s Chief Executive Officer on an interim basis.
Thomas Mangas, Chief Financial Officer of Starwood, added, "This is a financially compelling transaction which will result in a more diversified and recurring revenue mix for Starwood shareholders across a vertically integrated timeshare and exchange business. Vistana will be both complementary and core to the ILG organization, and we’re confident ILG will be an exceptional steward of Starwood’s well-respected brands. While Starwood has been focused on executing an asset-light strategy across the company, Vistana will benefit from ILG’s commitment to invest in new properties to drive increased growth. This transaction will better position the combined company for greater long-term growth, which will in turn create exciting opportunities for our teams.”
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