U.S. hospitality group Wyndham Worldwide Corp. WYN -1.46% is in advanced talks to sell its European vacation-rentals business to U.S. private-equity firm Platinum Equity Partners in a deal that values the division at around $1 billion including debt, according to people familiar the matter.
The deal, if completed, could be announced later this week.
The planned sale is part of Wyndham’s bigger strategy to spin off the company’s hotel and timeshare businesses into two separate publicly traded companies.
That move, announced in August, is meant to allow the separate units to better focus on their specific segments of the lodging sector to generate growth through acquisitions and other strategies.
The European vacation-rentals business wasn’t a natural fit for either the hotel or timeshare business, prompting Wyndham to explore a potential sale of the operation.
Platinum’s interest in Wyndham’s European vacation-rentals business illustrates the buyout industry's appetite for deals in the U.K. hospitality and leisure sector amid expectations that more British vacationers will stay in the U.K. rather than travel abroad because of economic uncertainty linked to Britain’s exit from the European Union.
In December 2016, Canadian-buyout firm Onex Corp. agreed to acquire Parkdean Resorts, a large resort operator in the U.K., for ￡1.35 billion ($1.88 billion).
Meanwhile, the hospitality and leisure industry in continental Europe stands tobenefit from the region’s economic rebound. Last month, the EU’s statistics agency said the eurozone economy grew by 2.5% in 2017 from the prior year, the fastest growth rate since 2007.
Platinum beat out rival private-equity firms Blackstone Group L.P . , CVC Capital Partners and PAI Partners for the Wyndham business, people familiar with the matter said.
Wyndham’s European operations are comprised of its U.K. business, which offers access to about 45,000 vacation properties under brands such as Hoseasons, cottages.com and James Villa Holidays; Novasol, a vacation-home rental company that operates in nearly 30 European countries; and Landal GreenParks, which offers chalets and campsites across more than 80 vacation parks that its manages and franchises in several countries, including the Netherlands, Germany and Denmark, according to Wyndham’s latest annual report.
Founded in 1995 by private-equity veteran Tom Gores, Los Angeles-based Platinum is currently investing its fourth fund, which closed on $6.5 billion in March last year. The firm has been doing deals in Europe since 2002.
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