Hoseasons and James Villa owner sold to private equity firm

Wyndham Worldwide has agreed to sell its European vacation rental business, which consists of more than two dozen brands including Hoseasons, James Villa Holidays and cottages.com.

The business is to be bought by private equity firm Platinum Equity for about $1.3 billion.

In conjunction with the sale, the European vacation rental business has entered into a 20-year agreement under which it will pay a royalty fee of 1% of net revenue to Wyndham’s hotel business for the right to use the Wyndham Vacation Rentals endorser brand.

The European vacation rentals operations will also participate as a redemption partner in the Wyndham Rewards loyalty programme.

Wyndham’s European vacation rental business is the largest manager of holiday rentals in~Europe, with more than 110,000 units in over 600 destinations in more than 25 countries.

It generates approximately $750 million in annual revenue and approximately $130 million of earnings before interest and taxes.

Wyndham Worldwide announced last August that it was separating its hotel business from its vacation ownership and timeshare exchange businesses. At the same time, it said it was looking for ‘strategic alternatives’ for its European vacation rental business.

The transaction is expected to close in the second quarter of 2018.

"Along with our planned separation and recently announced acquisition of La Quinta’s franchising and management businesses, this is another important step in the evolution of our Company," said Stephen P Holmes, chairman and CEO of Wyndham Worldwide.

"Our European vacation rental brands deliver a great consumer experience, have high brand recognition in their markets and have delivered strong, consistent results.

"Our goal has always been to position them for continued long-term growth. We conducted a rigorous strategic review process that generated strong interest from multiple parties, and we were pleased to find the right buyer.

"We are confident that as part of Platinum Equity’s portfolio, these businesses will have a bright future and will provide significant opportunities for their associates and business partners."

Platinum Equity is a leading global private equity firm with more than 20 years’ experience acquiring and operating businesses that have been part of large corporate entities.

"We have worked closely with Wyndham Worldwide to craft a divestiture solution that creates value for all sides and puts the European vacation rental business on a path for long-term success as a standalone business," said Platinum Equity partner Louis Samson.

"We are excited to partner with the management team to ensure a seamless transition while preparing our plans to drive additional growth, both organically and through prospective add-on acquisitions."

Platinum Equity’s current portfolio companies employ more than 16,000 people in the region. The proposed acquisition of Wyndham’s European vacation rental business represents Platinum Equity’s second European investment since the fourth quarter 2017 when the firm acquired Pattonair.

Wyndham plans to use the net proceeds from the sale for general corporate purposes, which may include debt repayment and/or funding of its recently announced acquisition of La Quinta Holdings’ hotel franchising and management businesses.