Deal Talk: Hyatt to Acquire Playa Hotels & Resorts

Good morning. Welcome to The Deal Talk where each week we break down a recent M&A deal.

Today we’re going to be walking through Hyatt Hotels Corporation’s agreement to acquire all outstanding shares of Playa Hotels & Resorts.

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DEEP DIVE
Hyatt to Acquire Playa Hotels & Resorts for $2.6 Billion

Hyatt Hotels Corporation has entered into a definitive agreement to acquire all outstanding shares of Playa Hotels & Resorts N.V. for approximately $2.6 billion, including $900 million in debt. Playa operates 24 high-end, all-inclusive resorts across Mexico, Jamaica, and the Dominican Republic. Hyatt, which currently owns about 9.4% of Playa's outstanding shares, will purchase the remaining shares for $13.50 each. The transaction is expected to close in late 2025, pending shareholder and regulatory approvals.

Hyatt, headquartered in Chicago, is a global hospitality company with a portfolio that includes luxury and business hotels, resorts, and vacation properties. With over 1,300 hotels in more than 75 countries, Hyatt has been expanding its presence in the all-inclusive resort market, particularly in key destinations throughout Mexico and the Caribbean.

Playa Hotels & Resorts, based in the Netherlands, specializes in managing and owning all-inclusive resorts in top-tier vacation destinations. With 24 resorts and over 9,000 rooms, Playa focuses on high-end experiences in Mexico and the Caribbean.

Strategic Rationale

Hyatt is acquiring Playa to expand its all-inclusive offerings and strengthen its position in the luxury resort segment. The acquisition aligns with Hyatt’s long-term strategy of increasing its footprint in high-growth leisure travel markets. The all-inclusive segment has been a key focus for Hyatt since its $2.7 billion acquisition of Apple Leisure Group in 2021.

For Playa, joining Hyatt's global network provides opportunities for growth and access to a broader distribution platform. Playa's properties will benefit from Hyatt’s strong brand recognition and loyalty programs, driving higher occupancy rates and revenue.

Financial Impact & Market Multiples

Hyatt will finance the acquisition through new debt and plans to reduce leverage by selling select Playa-owned properties. The company aims to generate at least $2 billion from asset sales by 2027, reinforcing its asset-light strategy.

Key Financial Metrics:

• Transaction Value: $2.6 billion (including $900 million in debt)

• Offer per Playa Share: $13.50

• Hyatt’s Current Ownership in Playa: 9.4%

• Purchase Premium: 40.5%

• Playa’s Revenue (2024E): $1.45 billion

• Playa’s Adjusted EBITDA (2024E): $435 million

• Playa’s Implied EV/EBITDA Multiple: 9.2x

• Expected Proceeds from Asset Sales: At least $2 billion by 2027

• Impact on Hyatt’s Net Leverage: Expected to increase before asset sales reduce debt

Deal Structure & Financial Advisors

The all-cash transaction involves Hyatt acquiring all outstanding shares of Playa it does not already own. Hyatt will finance the acquisition through new debt, planning to maintain financial flexibility by selling owned properties to third-party buyers. This supports Hyatt’s asset-light business model, which focuses on management and franchise agreements rather than property ownership.

• Financial Advisors:

  • Hyatt: J.P. Morgan

  • Playa: Morgan Stanley

• Legal Advisors:

  • Hyatt: Latham & Watkins LLP

  • Playa: Simpson Thacher & Bartlett LLP

Opinion & Outlook

What Could Go Right?

• Enhanced Market Position strengthens Hyatt’s leadership in the high-end all-inclusive resort market. 

• Strategic Alignment with Hyatt’s expansion in the leisure travel sector, particularly in Mexico and the Caribbean. 

• Operational Synergies by integrating Playa’s properties into Hyatt’s existing framework, leveraging scale and efficiency.

What Could Go Wrong?

• Regulatory Approvals: The deal is subject to both U.S. and international regulatory scrutiny. Given Playa’s significant presence in multiple countries, regulatory delays or conditions imposed by local governments could complicate or prolong the acquisition process. 

  Market Volatility & Economic Conditions: The hospitality industry is sensitive to macroeconomic factors such as inflation, currency fluctuations, and changes in consumer travel behavior. Any downturn in the global travel sector could impact the expected revenue growth from Playa’s resorts, affecting Hyatt’s return on investment.

Conclusion

This transaction highlights Hyatt’s continued expansion in the all-inclusive resort segment, reinforcing its commitment to luxury travel. For Hyatt, acquiring Playa enhances its footprint in key vacation destinations, while for Playa, the deal provides access to Hyatt’s robust distribution network and global customer base.

As consolidation in the hospitality industry continues, expect further realignment, with companies focusing on high-margin, scalable business models to remain competitive in a rapidly evolving travel landscape.

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See you next week,

The Deal Talk Team