Hilton Grand Vacations Inc. · NYSE:HGV
Hilton Grand Vacations — Merger or Acquisition (March 2021)
19 slides from Hilton Grand Vacations's merger presentation, Mar 10, 2021
Slide 1: Hilton Grand Vacations to Acquire Diamond Resorts
Hilton Grand Vacations to Acquire Diamond Resorts March 10, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements convey management’s expectations as to our futu
Slide 3: The acquisition of Diamond Resorts presents a transformational opportunity
The acquisition of Diamond Resorts presents a transformational opportunity 1 Significant value creation from scale 4 Generates $125M+ in run-rate cost benefits of combining the largest independent synergies expected to be achieved in the first 24 timeshare company with the strength of Hilton Grand m
Slide 4: Transaction overview
Transaction overview • Total deal value of $3.0 billion with consideration paid by HGV at closing expected to be $1.4 billion1 Consideration • Funded through the issuance of approximately 34.5 million shares of HGV common stock • Purchase price is 7.0x Diamond Resorts International (“DRI”) Adjusted
Slide 5: A powerful combination…
A powerful combination… • World-class hospitality with the strength of the • Largest timeshare operator with no hotel trusted Hilton brand brand affiliation • 62 upper upscale and luxury properties in premier • Extensive network of 92 leisure resorts across resort destinations the globe, with strong
Slide 6: …creating the premier vacation ownership company
…creating the premier vacation ownership company 2019 operating metrics Tours Owners 945K 878K 663K 731K 660K 1 448K 405K 383K 326K 280K 236K 220K W Destinations Destinations Contract Sales Resorts $ in millions 230 $2,355 $2,342 $1,524 150 $1,410 110 $932 91 $619 59 45 Destinations Destinations VPG
Slide 7: Synergies are a significant EBITDA opportunity
Synergies are a significant EBITDA opportunity Revenue levers Revenue synergies Cost synergies 1 More products HGV new buyer lift General & administrative efficiencies • Branded trust product • Expanded chain scale • Broader price coverage Diamond new buyer lift • Experiential offerings Operational
Slide 8: HGV will have the broadest chain scale offering in the industry
HGV will have the broadest chain scale offering in the industry Upper Midscale Upscale Upper Upscale Luxury Midscale Hilton Vacation Club Former Diamond Properties Competitors1 Enhances alignment with Hilton system and their 112 million Hilton Honors members 7 1) Illustrative chain scale positioning
Slide 9: Wider range of price points will broaden addressable market
Wider range of price points will broaden addressable market List price per week for HGV vs. Diamond inventory… …enhances value proposition for more Diamond’s 75th percentile price point sits just below HGV’s demographics, expanding our core market lowest 25th percentile1 2 # US householders age 25-7
Slide 10: More properties in more places
More properties in more places Benefits of expanded geographic portfolio Whistler/Vancouver • Higher tour flow, with more locations Panorama to access and offer • Higher conversion, with broader appeal Tremblant to new customers Blue Mountain Chicago US + Canada Only HGV DRI New York South Lake Taho
Slide 11: New branded trust offers additional benefits
New branded trust offers additional benefits Deeded points Trust points Advantages ? Premium pricing for certainty of availability in high ? Smoother sales and upgrades, with less specific for combined demand real estate markets matching of buyer to property entity ? Inventory sourcing flexibility a
Slide 12: We'll generate meaningful annuity revenue from recurring, capital-efficient sources
We’ll generate meaningful annuity revenue from recurring, capital-efficient sources NOG generates several high margin, recurring fee streams: Club membership fees Property ~40% ~50% management fees of Segment Adjusted EBITDA of Segment from recurring Adjusted EBITDA sources1 from recurring Financing
Slide 13: Focus on efficiency to drive free cash flow conversion
Focus on efficiency to drive free cash flow conversion Operating efficiency Working capital efficiency Tap significant developed inventory Maintain industry-leading margins pipeline to reduce near-term spending needs Reduce long-term inventory spending Realize $125M+ of run-rate cost synergies with
Slide 14: We will maintain our financial flexibility
We will maintain our financial flexibility Pro-forma liquidity of $1.0 billion at year-end 2020 Nearly $300 million of receivables eligible for securitization or Diamond Embarc Whistler warehouse borrowing Whistler, Canada Capital market efficiencies from increased scale of combined ABS platform Cas
Slide 15: We have the unique capabilities and brand to deliver this deal's value
We have the unique capabilities and brand to deliver this deal’s value Premier branded timeshare operator with 29 years of NOG and Proven brand integration into our industry leading margins marketing engine, now applied across a broader owner, demographic, and property base Powerful trust-based netw
Slide 16: Appendix
Appendix HILTON
Slide 17: Transaction sources and uses
Transaction sources and uses Sources Uses Equity Issued to DRI1 $1,392 Purchase of DRI $1,392 Cash on Hand 304 Debt Assumed2 598 New Debt Issued 2,323 Debt Repaid 2,503 Debt Assumed2 598 Transaction Fees & Other 125 Total Sources $4,617 Total Uses $4,617 Note: Totals may not foot due to rounding 16
Slide 18: 2019 Net income to Adjusted EBITDA reconciliation
2019 Net income to Adjusted EBITDA reconciliation Diamond Pro Forma ($ in millions) HGV1 Resorts2 Combined Net income (loss) $216 $(43) $173 Interest expense 43 166 209 Income tax expense 57 4 61 Depreciation and amortization 44 118 162 Interest expense, depreciation and amortization included 3 3 in
Slide 19: Announcement of the Acquisition of Diamond Resorts International call transcript
HILTON GRAND VACATIONS Hilton Grand Vacations Inc. Announcement of the Acquisition of Diamond Resorts International Wednesday, March 10, 2021 8:30 A.M. Eastern CORPORATE PARTICIPANTS Mark Melnyk – Vice President of Investor Relations Mark Wang – President and Chief Executive Officer Daniel J. Mathew
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