Hilton Grand Holidays to Purchase Diamond Resorts, Creating the Premier Leisure Operator With the Broadest Providing within the Trip Possession Trade

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ORLANDO, Fla.–(BUSINESS WIRE)–Hilton Grand Holidays Inc. (NYSE:HGV) (“HGV” or “the Firm”) at present introduced that it has entered right into a definitive settlement to accumulate Diamond Resorts Worldwide, Inc. (“Diamond”) from funds (the “Apollo Funds”) managed by associates of Apollo International Administration, Inc. (NYSE:APO) (along with its consolidated subsidiaries, “Apollo”), funds managed by associates of Reverence Capital Companions (“Reverence”), and different Diamond stockholders, in a stock-based transaction with an fairness worth of roughly $1.4 billion1. Underneath the phrases of the settlement, the Apollo Funds and different Diamond stockholders will obtain 34.5 million shares of HGV widespread inventory, topic to customary changes.

The acquisition will mix the energy of HGV’s model and tradition with Diamond, the most important impartial timeshare operator. Diamond’s 92 leisure resorts and almost 400,000 homeowners uniquely complement HGV’s 62 upscale and luxurious properties and over 325,000 homeowners, and the mix will create the premier trip possession firm with the broadest providing within the trade.

“I’m excited to announce our transformational settlement so as to add Diamond Resorts to the Hilton Grand Holidays household, accelerating our subsequent part of development,” mentioned Mark Wang, president and CEO of Hilton Grand Holidays. “This strategic mixture will leverage the strengths of every firm, positioning us to drive important Internet Proprietor Progress whereas enhancing efficiencies of scale and producing important shareholder worth. Diamond’s in depth regional, drive-to community of resorts and expanded demographics uniquely complement HGV’s best-in-class lead era, world-class hospitality, and premier locations backed by the energy of the Hilton model. For our valued staff members, homeowners and company, this mixture creates new alternatives to supply thrilling locations and memorable trip experiences whereas persevering with to supply distinctive ranges of service.”

“Via this settlement, HGV and Diamond will create a brand new international customary of trip possession hospitality,” mentioned Mike Flaskey, CEO of Diamond Resorts. “Collectively, we’ll broaden Diamond’s distinctive occasions and live performance platform and ship the broadest vary of world-class experiences accessible within the trade, offering our members and homeowners with further flexibility, unforgettable holidays and experiences of a lifetime. We’re thrilled to hitch the HGV household and sit up for reaching new heights of excellence.”

Transaction Highlights

  • Permits important worth creation from scale: combines the most important impartial timeshare firm with Hilton Grand Holidays’ robust model and tradition
    • Expands and diversifies HGV’s resort portfolio into over 20 new markets.
    • The mixed firm can have 720,000 homeowners, 154 resorts and 48 gross sales facilities.
  • Diversifies HGV’s portfolio: provides further drive-to locations and permits HGV to leverage the Hilton community to widen buyer attain
    • Doubles the variety of trip choices for the mixed proprietor base.
    • Diamond’s complementary footprint will bolster HGV’s robust community of seashore, attraction-based, and concrete markets, whereas including new regional drive-to locations in out of doors, desert and ski places.
    • Broader vary of pricing and product choices will widen buyer attain, enhancing alignment with the 112 million Hilton Honors members​.
  • Accelerates launch of HGV-branded belief product providing: rebrand Diamond’s properties over time to drive income development in a brand new buyer phase
    • Combining HGV’s points-based deeded product with Diamond’s points-based belief construction will permit the Firm to cater to a wider viewers, appeal to extra new consumers and drive incremental development in a capital-efficient method.
    • HGV’s deeded product gives premium pricing, stock sourcing flexibility, and the power to pre-sell initiatives to assist robust project-level money move, whereas giving consumers and homeowners the worth of assured availability.
    • The introduction of a belief product permits for decrease boundaries to possession, decreased stock supply volatility and stock recycling, enabling smoother gross sales and upgrades whereas offering consumers and homeowners community and pricing flexibility.
    • Integrates Diamond’s revolutionary Occasions of a Lifetime® experiential gross sales and advertising platform that drives robust engagement and Quantity Per Visitor (VPG) premiums with HGV’s proprietor base.
  • Generates over $125 million in run-rate value synergies, anticipated to be achieved within the first 24 months following shut
    • Important future income synergy alternatives.
  • Will increase recurring EBITDA streams and drives general money move, with adjusted free money move per share accretion in 12 months one2
    • The mixed firm is anticipated to generate steady-state adjusted free money move conversion of 50-60%, pushed by its realization of value synergies, important stock pipeline, acquired stock and decreased long-term stock spending.
    • Including new homeowners embeds further worth for the corporate over the lifetime of their possession.
    • The mixed firm is anticipated to generate roughly 50% of Phase Adjusted EBITDA from recurring sources, together with membership membership charges, property administration charges and financing charges.
  • Compelling valuation and deal construction facilitate monetary flexibility and deleveraging
    • Important money move era is anticipated to permit for fast deleverage, returning to beneath 3.0x inside 24 months.
    • Professional-forma liquidity of $1.0 billion at year-end 2020.

Transaction Particulars

Underneath the phrases of the settlement, the Apollo Funds and the opposite Diamond stockholders, together with the Reverence Funds, are anticipated to obtain 34.5 million shares of HGV widespread inventory, valued at roughly $1.4 billion, topic to customary changes. Upon transaction shut, current HGV shareholders will personal roughly 72% of the mixed firm and the Apollo Funds will personal roughly 28% of the mixed firm.

The transaction, which was unanimously accredited by the Board of Administrators for each corporations, is anticipated to shut in the summertime of 2021, topic to customary closing circumstances and regulatory approvals. The issuance of HGV widespread inventory within the transaction is topic to shareholder approval.

HGV’s administration staff, together with President & Chief Govt Officer Mark Wang, Chief Monetary Officer Dan Mathewes, and Chief Working Officer Gordon Gurnik, will proceed to serve of their present roles upon transaction shut. HGV’s Board of Administrators will probably be expanded from 7 to 9 members, and the Apollo Funds can have the appropriate to nominate two administrators so long as their fairness possession stays at or above 15% of the excellent inventory at closing and one director so long as their fairness possession stays at or above 10% of the excellent inventory at closing.

Advisors

BofA Securities is appearing as unique monetary advisor for HGV, and Alston & Chicken LLP, Simpson Thacher & Bartlett LLP, and Foley & Lardner LLP are appearing as authorized counsel. Credit score Suisse is appearing as lead monetary advisor and Goldman Sachs can be appearing as monetary advisor for Diamond, with Paul, Weiss, Rifkind, Wharton & Garrison LLP appearing as authorized counsel.

HGV has obtained financing commitments from BofA Securities, Deutsche Financial institution and Barclays with PJT Companions appearing as capital markets advisor to HGV.

Convention Name

HGV will host a convention name for analysts and traders at present at 8:30 a.m. EST.

To entry the dwell teleconference, please dial 1-877-407-0784 within the U.S./Canada (or +1-201-689-8560 internationally) roughly quarter-hour previous to the teleconference’s begin time. A dwell webcast may even be accessible by logging onto the HGV Investor Relations web site at traders.hgv.com. The convention name will probably be webcast dwell and accessible by navigating to the next hyperlink: https://occasion.on24.com/wcc/r/3058978/5D17131468865BE0EF218C6C1EB0E6D0.

A replay will probably be accessible starting three hours after the teleconference’s completion via March 17, 2021. To entry the replay, please dial 1-844-512-2921 within the U.S. (+1-412-317-6671 internationally) utilizing ID# 13717389. A webcast replay and transcript will probably be accessible inside 24 hours after the dwell occasion at https://traders.hgv.com.

About Hilton Grand Holidays Inc.

Hilton Grand Holidays Inc. (NYSE:HGV) is acknowledged as a number one international timeshare firm. With headquarters in Orlando, Florida, Hilton Grand Holidays develops, markets and operates a system of brand-name, high-quality trip possession resorts in choose trip locations. The Firm additionally manages and operates two revolutionary membership membership applications: Hilton Grand Holidays Membership® and The Hilton Membership®, offering unique change, leisure journey and reservation companies for greater than 325,000 membership members. For extra info, go to www.hiltongrandvacations.com.

About Apollo

Apollo is a number one international funding supervisor with places of work in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo, amongst others. Apollo had property underneath administration of roughly $455 billion as of December 31, 2020 in credit score, non-public fairness and actual property funds. For extra details about Apollo, please go to www.apollo.com.

About Diamond Resorts

Diamond Resorts gives locations, occasions and experiences to assist members make a behavior of breaking from the routine. From unforgettable getaways to unique live performance sequence to VIP receptions and dinners, members flip to Diamond to recharge, reconnect and remind one another what issues most. Our give attention to high quality resorts, customer support and suppleness means members can return to a favourite resort, guide a cruise to discover new nations or attend a once-in-a-lifetime occasion with the identical degree of confidence and anticipation. With entry to a world of leisure and actions, a Diamond membership ensures that individuals are all the time trying ahead to trip.

About Reverence Capital Companions

Reverence Capital Companions is a non-public funding agency centered on thematic investing in main international, middle-market Monetary Companies companies via management and affect oriented investments in 5 sectors: (1) Depositories and Finance Firms, (2) Asset and Wealth Administration, (3) Insurance coverage, (4) Capital Markets and (5) Monetary Know-how/Funds. The agency was based in 2013, by Milton Berlinski, Peter Aberg and Alex Chulack, who collectively deliver over 90 years of advisory and investing expertise throughout a variety of economic companies sectors. For extra info go to www.reverencecapital.com

Ahead-Trying Statements

This communication comprises forward-looking statements throughout the that means of Part 27A of the Securities Act of 1933, as amended and Part 21E of the Securities Alternate Act of 1934, as amended. Ahead-looking statements convey administration’s expectations as to our future, and are primarily based on administration’s beliefs, expectations, assumptions and such plans, estimates, projections and different info accessible to administration on the time we make such statements. Ahead-looking statements embody all statements that aren’t historic info, together with these associated to our revenues, earnings, money move and operations, and could also be recognized by terminology such because the phrases “outlook,” “imagine,” “anticipate,” “potential,” “aim,” “continues,” “could,” “will,” “ought to,” “may,” “seeks,” “roughly,” “initiatives,” predicts,” “intends,” “plans,” “estimates,” “anticipates” “future,” “steering,” “goal,” or the damaging model of those phrases or different comparable phrases.

We warning you that our forward-looking statements contain recognized and unknown dangers, uncertainties and different elements, together with these which can be past our management, that will trigger our precise outcomes, efficiency or achievements to be materially totally different from the longer term outcomes. Elements that might trigger our precise outcomes to vary materially from these contemplated by our forward-looking statements embody: the prevalence of any occasion, change or different circumstances that might give rise to the termination of the merger settlement; the lack to finish the proposed merger because of the failure to acquire stockholder approval for the proposed merger or the failure to fulfill different circumstances to completion of the proposed merger, together with {that a} governmental entity could prohibit, delay or refuse to grant approval for the consummation of the transaction; dangers associated to disruption of administration’s consideration from HGV’s ongoing enterprise operations because of the transaction; the impact of the announcement of the proposed merger on HGV’s relationships, working outcomes and enterprise typically; the chance that the proposed merger won’t be consummated in a well timed method; exceeding the anticipated prices of the merger; the fabric influence of the COVID-19 pandemic on our enterprise, working outcomes, and monetary situation; the extent and length of the influence of the COVID-19 pandemic on international financial circumstances; our capacity to fulfill our liquidity wants; dangers associated to our indebtedness; inherent enterprise dangers, market traits and competitors throughout the timeshare and hospitality industries; our capacity to efficiently supply stock and market, promote and finance VOIs; default charges on our financing receivables; the status of and our capacity to entry Hilton manufacturers and applications, together with the chance of a breach or termination of our license settlement with Hilton; compliance with and modifications to United States and international legal guidelines and laws, together with these associated to anti-corruption and privateness; dangers associated to our acquisitions, joint ventures, and different partnerships; our dependence on third-party improvement actions to safe just-in-time stock; the efficiency of our info know-how methods and our capacity to take care of knowledge safety; regulatory proceedings or litigation; adequacy of our workforce to fulfill our enterprise and operation wants; our capacity to draw and retain key executives and workers with expertise and capability to fulfill our wants; and pure disasters or opposed geo-political circumstances. Any a number of of the foregoing elements may adversely influence our operations, income, working margins, monetary situation and/or credit standing.

For a extra detailed dialogue of those elements, see the data underneath the captions “Threat Elements” and “Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations” in HGV’s most up-to-date Annual Report on Kind 10-Ok filed with the Securities and Alternate Fee on March 1, 2021, as such info could also be up to date infrequently in our annual reviews, quarterly reviews, present reviews and different filings we make with the Securities and Alternate Fee.

HGV’s forward-looking statements communicate solely as of the date of this communication or as of the date they’re made. HGV disclaims any intent or obligation to replace any “ahead trying assertion” made on this communication to replicate modified assumptions, the prevalence of unanticipated occasions or modifications to future working outcomes over time.

Further Info and The place to Discover It

This submitting could also be deemed solicitation materials in respect of the proposed acquisition of Diamond Resorts by HGV. In reference to the proposed merger transaction, HGV will file with the SEC and furnish to HGV’s stockholders a proxy assertion and different related paperwork. This submitting doesn’t represent a solicitation of any vote or approval. Stockholders are urged to learn the proxy assertion when it turns into accessible and every other paperwork to be filed with the SEC in reference to the proposed merger or included by reference within the proxy assertion as a result of they’ll comprise vital details about the proposed merger.

Traders will be capable to get hold of freed from cost the proxy assertion and different paperwork filed with the SEC on the SEC’s web site at https://www.sec.gov. As well as, the proxy assertion and HGV’s annual reviews on Kind 10-Ok, quarterly reviews on Kind 10-Q, present reviews on Kind 8-Ok and amendments to these reviews filed or furnished pursuant to Part 13(a) or 15(d) of the Securities Alternate Act of 1934 can be found freed from cost via HGV’s web site at https://traders.hgv.com/ as quickly as fairly practicable after they’re electronically filed with, or furnished to, the SEC.

The administrators, govt officers and sure different members of administration and workers of HGV could also be deemed “members” within the solicitation of proxies from stockholders of HGV in favor of the proposed merger. Info concerning the individuals who could, underneath the foundations of the SEC, be thought-about members within the solicitation of the stockholders of HGV in reference to the proposed merger will probably be set forth within the proxy assertion and the opposite related paperwork to be filed with the SEC. You’ll find details about the Firm’s govt officers and administrators in its Annual Report on Kind 10-Ok for the fiscal 12 months ended December 31, 2020 and in its definitive proxy assertion filed with the SEC on Schedule 14A on March 26, 2020.

Non-GAAP Monetary Measures

This press launch consists of discussions of phrases that aren’t acknowledged phrases underneath U.S Typically Accepted Accounting Rules (“GAAP”), and monetary measures that aren’t calculated in accordance with GAAP, corresponding to Adjusted EBITDA. We derived any non-GAAP monetary measures from our audited consolidated monetary statements, and Dakota Holdings, Inc.’s monetary statements. We imagine such non-GAAP measures present helpful info to our traders about us and our monetary situation and outcomes of operations since these measures are utilized by our administration to judge our working efficiency and by securities analysts and traders as widespread monetary measures for comparability functions in our trade. See our most up-to-date Annual Report on Kind 10-Ok for a extra detailed dialogue of the meanings of those phrases, our reasonings for offering non-GAAP monetary measures and full reconciliations of those measures to essentially the most instantly comparable GAAP monetary measure.


1 Assumes issuance of 34.5 M shares of inventory at $40.32 per share

2 Excluding one-time transaction associated bills

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