Wyndham Worldwide has announced its acquisition of La Quinta’s hotel franchise and management businesses for $1.95 billion. The deal, which is expected to close in the second quarter of 2018, will include all of La Quinta’s nearly 900 midscale, upper midscale, and economy locations. The acquisition will also include the repayment of about $750 million in debt held by La Quinta and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta’s owned real estate assets into CorePoint Lodging. Should the agreement fall through prior to closing, Wyndham will receive a $37 million termination fee from La Quinta.
La Quinta will be absorbed as the 21st brand in Wyndham’s lineup. Wyndham Hotel Group currently oversees several prominent lodging brands in the U.S., including Ramada, Days Inn, and Super 8. The addition of La Quinta, one of the largest midscale brands in the industry, will build upon Wyndham Hotel Group’s strong midscale presence, expand its reach further into the fast-growing upper-midscale segment, and position Wyndham Hotel Group to be the preferred partner and accommodations provider of developers and guests.
“La Quinta will immediately become one of our flagship brands,” said Geoff Ballotti, president and CEO of Wyndham Hotel Group. “It is an exceptionally strong brand that is led by service-minded associates who deliver some of the highest customer engagement levels in our industry. We expect that La Quinta guests and franchisees will benefit from our intense focus on product quality and our best-in-class technology, digital, loyalty, and distribution platforms. This acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business.”
