Marriott Vacations Worldwide Corporation · NYSE:VAC
Marriott Vacations Worldwide — Merger or Acquisition (January 2021)
11 slides from Marriott Vacations Worldwide's merger presentation, Jan 26, 2021
Slide 1: Marriott Vacations Worldwide to Acquire Welk Resorts
MARRIOTT VACATIONS WORLDWIDE TO ACQUIRE WELK RESORTS JANUARY 26, 2021
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements” within the meaning of federal securities laws, including statements about anticipated future events and expectations that are not historical facts and the anticipated benefits of the acquisition of Welk Resorts. The Company cautions
Slide 3: Transaction at a Glance
Transaction at a Glance • Entered into an agreement to acquire Welk Resorts (“Welk”) for approximately $430 million including ~1.4 million MVW common shares. • Welk is one of the largest privately owned vacation ownership (“VO”) companies in the U.S. with a high-quality portfolio of eight VO resorts
Slide 4: Strategic Rationale
Strategic Rationale Opportunity to expand Hyatt Residence Club and accelerate its growth Rebranding Welk will more than double the number of Hyatt Residence Club Owners High quality and complementary resort portfolio primarily in West Coast vacation markets Expect to increase Welk’s contract sales a
Slide 5: Overview of Welk
Overview of Welk One of the largest privately owned VO companies in the U.S. 8 Welk VO Resorts ~1,400 Total Keys 55,000+ Owners J One Village Place by Welk Resorts Lake Tahoe, CA 2019 Adjusted EBITDA Contribution 3+ years Built Inventory VO-Sales Rentals 3% $215M 14% 2019 Revenue Management 20% 63%
Slide 6: Highly Complementary Portfolio
Highly Complementary Portfolio 1 2 3 4 5 Welk Resorts San Diego, Desert Oasis by The Lodges at Timber Welk Resorts El Corazon, Sirena del Mar, Cabo CA Welk Resorts, CA Ridge, MO NM San Lucas, MX 1 Welk Resorts San Diego, Escondido, CA Keys: 714 2 Desert Oasis by Welk Resorts, Palm Springs, CA
Slide 7: Long-term Growth and Margin Improvement
Long-term Growth and Margin Improvement Contract sales ($M) • Will expand number of Hyatt Residence Club Plan to rebrand resorts by 50% and keys by 90% Welk to Hyatt $150 - $160 • More than double number of Owners to ~90k 1 Residence Club $123 • 3+ years of built inventory Increase • Replace high-co
Slide 8: Attractive Transaction Economics
Attractive Transaction Economics ~5.6x Adjusted EBITDA $95M ~$461M ~$366M Transaction Built inventory Value Sirena del Mar by Welk Resorts, value & land1 net of built Cabo San Lucas, MX inventory & land Transaction value of ~$461m includes ~$31m of transaction costs and anticipated rebranding costs.
Slide 9: Summary
Summary Opportunity to expand Hyatt Residence Club and accelerate its growth Rebranding Welk will more than double the number of Hyatt Residence Club Owners High quality and complementary resort portfolio primarily in West Coast vacation markets Expect to increase Welk’s contract sales and expand ma
Slide 10: Appendix
APPENDIX Welk Resorts San Diego, Escondido, CA MVW A-1
Slide 11: Welk Net Income to Adjusted EBITDA Reconciliation
Welk Net Income to Adjusted EBITDA Reconciliation (In millions) 2019 Net Income $ 12 State and Foreign Income Taxes 1 Cash Flow Depreciation & Amortization 7 Amortization of Non Recurring Debt Issuance Costs 1 Recourse Financing Expense 5 EBITDA $ 26 Non Recurring Expenses 3 Adj. EBITDA $ 29 Source:
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