Wyndham Worldwide on Thursday agreed to acquire La Quinta's franchise and managements businesses for $1.95
billion. The midscale brand has nearly 900 hotels.
The acquisition, expected to close in the second quarter, won't include La Quinta's real estate
holdings, which will be spun off into a real estate investment trust (REIT)
called CorePoint Lodging Inc. La Quinta CEO Keith Cline will become CorePoint's
chief.
Last year, Wyndham Worldwide said it would
spin off its hotel division, Wyndham Hotel Group. Wyndham Worldwide expects that the Wyndham Hotel
Group and CorePoint spinoffs will happen by the end of the second quarter.
Breaking down the La Quinta deal, Wyndham will pay $1
billion in cash, assume $715 million of La Quinta's debt, and set aside a $240
million reserve for the expected tax obligation related to the CorePoint
spinoff.
With La Quinta, Wyndham Hotel Group extends its lead as the
world's largest hotel company by hotel count. After the acquisition, Wyndham
will have more than 9,000 hotels in 75 countries,
The company is already deep in the midscale sector with
Hawthorn Suites, Ramada and Wingate.
Marriott International has more than 6,400 properties. InterContinental
Hotels Group has almost 5,300, and Hilton has more than 5,100.
La Quinta was valued at about $2.1 billion when majority
owner Blackstone took the company public in 2014.