Wyndham Sells 25 Non-Strategic Assets
Wyndham International announced today that it has entered into a definitive agreement to sell 25 non-strategic hotels to a partnership comprised of a private investment fund managed by Goldman Sachs and affiliates of Highgate Holdings (15 Wyndham-branded and 10 non-proprietary hotels). The purchase price of the transaction is $366 million. As part of the agreement, all 15 Wyndham-branded assets will remain in the brand’s portfolio pursuant to new franchise agreements. The transaction is expected to close during the first quarter of 2005. “The sale of these 25 hotels completes our planned disposition program, a key component of our strategic plan announced in June 1999,” stated Fred J. Kleisner, chairman, president, and chief executive officer for Wyndham. “Wyndham’s positioning as a branded hotel operating company solely focused on our core Wyndham brand has been realized.”
The 25 properties included in the agreement: the Doubletree Tallahassee, Fla.; Doubletree Des Plaines, Ill.; Doubletree Minneapolis; Marriott Atlanta North Central; Hyatt Lexington (Ky.); Hilton Denver; Hilton Newark, N.J.; Hilton Cleveland; Holiday Inn Houston; Radisson Town & Country (Houston); Wyndham Arlington (Texas); Wyndham Andover (Ma.); Wyndham Westborough (Ma.); Wyndham City Center (Washington, D.C.); Wyndham Commerce (Ca.); Wyndham Dallas Market Center; Wyndham Grand Bay - Coconut Grove (Miami); Wyndham Harrisburg (Pa.); Wyndham Las Colinas (Irving, Texas); Wyndham Newark Airport; Wyndham Pittsburgh Airport; Wyndham Syracuse (NY); Wyndham Toledo (Ohio); Wyndham Westshore (Tampa, Fla.); and the Wyndham Indianapolis.
As of Dec. 31, 2004, this transaction will result in a $49 million non-cash impairment to the book values of certain assets to be sold. Upon the close of the transaction in 2005 a gain of approximately $34 million will be recorded on the remainder of the assets in the portfolio.
Over the last five years, Wyndham has sold approximately 180 non-strategic properties for gross proceeds of over $2.5 billion while growing its core Wyndham brand portfolio to over 150 hotels across the U.S., Canada, the Caribbean, Mexico and the United Kingdom. The net proceeds from the asset sales have been used to reduce debt and overall Company leverage.
Kleisner added, “Now that our formal asset disposition program is complete, the reduction of our Company debt allows us to take advantage of the current capital market conditions and refinance our 2006 corporate debt maturities. The reduction of debt also allows us to invest in our remaining 33 owned assets through high return investment projects and access capital for brand growth in strategic markets.”
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