Marriott has today signed definitive agreement to acquire Canadian based Delta Hotels & Resort chain of 38 hotels for C$168.
This purchase makes Marriott the biggest hotel chain in Canada consisting of 124 properties and 27,000 rooms.
I actually stayed at one Delta property close to Vancouver couple of years back and uploaded a walk though of the room I had to YouTube. You can access roughly 500 hotel videos on LoyaltyLobby’s YouTube channel here.
Here’s the press release from Marriott:
BETHESDA, Md., January 27, 2015 – Continuing its rapid global expansion, Marriott International, Inc. (NASDAQ: MAR) announced today it has signed definitive agreements to acquire the Delta Hotels and Resorts® brand and management and franchise business from Delta Hotels Limited Partnership, a subsidiary of British Columbia Investment Management Corporation (bcIMC) for C$168 million (approximately $135 million).
The Delta brand comprises a diverse range of hotels and resorts with 38 hotels and 10,000 rooms in more than 30 cities across Canada. Delta offers a fresh approach to the guest experience, including its new ModeRoom™ guest room designs, innovative use of new technologies, and new properties, such as its flagship Delta Toronto located at the hub of Canada’s hottest high-rise neighborhood, South Core. When completed, the transaction will increase Marriott’s distribution in Canada to more than 120 hotels and 27,000 rooms, making Marriott the largest full service hotel company in Canada.
Arne Sorenson, president and chief executive officer of Marriott International, said, “Delta has an impressive portfolio of hotels that are among the most preferred in Canada. With this acquisition, we are continuing our focus on building our brand portfolio and growing in attractive regions outside the U.S. Combining the strong Delta brand with Marriott’s hotel development expertise will accelerate growth of the brand in Canada and in other markets around the world.”
David Grissen, group president overseeing The Americas for Marriott International, said, “at completion, this transaction will propel Marriott to a leading position in Canada. Canada represents the largest international source market for our hotels in the United States, and the integration of Delta into Marriott’s 4,100 plus hotel global portfolio will provide new travel opportunities for both Delta and Marriott customers. We expect integrating Delta into Marriott’s systems, sales engines, Marriott.com, and the more than 49 million member Marriott Rewards loyalty program will create meaningful operational synergies for owners and franchisees.
Marriott’s Americas management team looks forward to working closely with Delta’s hotel owners and franchisees, and welcoming Delta employees, who will have access to a larger range of opportunities in North America and globally once the transaction closes.”
Under terms of the agreement, Marriott is acquiring the Delta management and franchise business, as well as the Delta brand and related intellectual property. At stabilization, after realizing certain operating synergies, Marriott expects the purchase price to be approximately 10 times annualized earnings before interest, taxes, depreciation and amortization (EBITDA).
bcIMC-affiliated entities own 13 Delta hotels (and one under development) and will sign new 30-year management agreements with Marriott for these properties. Third parties own the other 25 Delta hotels; 15 are managed by Delta and 10 are franchised. In total, five managed hotels (approximately 1,100 rooms) are under development.
The transaction is subject to receipt of certain third party and governmental consents, including by the Canadian Competition Bureau. Assuming receipt of the necessary approvals, the parties expect to close the transaction in the second quarter of 2015. Marriott does not expect the transaction will have a material impact on its 2015 results, excluding one-time transaction and integration costs.
Avington acted as exclusive financial advisor to bcIMC.
The integration of Cape Town based Protea Hotels to Marriott Rewards has been taking a long time and still hasn’t been completed, although the deal was decided already back in 2013.
I would imagine that the integration of Delta Hotels to Marriott Rewards would be more swiftly operation due to cultural issues and I presume that they are using modern PMS system such as Opera.