For some of the biggest names in private equity, nothing sounds better during the holiday season than a Caribbean vacation.
Just ask TPG, KKR and Bain Capital, all of which were recently involved in massive deals dedicated to staying and playing in the tropics.
First up: Pace Holdings (NASDAQ: PACE), a special-purpose acquisition company formed by TPG, has agreed to use the $450 million it raised in an IPO last year by acquiring Playa Hotels & Resorts in a deal that will take Playa public. Playa is the operator of 13 resort locations in the Dominican Republic, Jamaica and Mexico. The new business anticipates an initial market value of about $1.75 billion upon completion of the deal.
Much about the business will stay the same. It will still operate under the Playa brand, and existing management led by chairman and CEO Bruce Wardinski will remain in place.
The use of such special-purpose acquisition vehicles has experienced a bit of a renaissance after falling out of favor in recent years. A vehicle created by The Gores Group took Hostess Brands (NASDAQ: TWNK) public last month, and a SPAC formed by Riverstone did the same for Centennial Resource Development (NASDAQ: CDEV) in October.
In a separate deal, meanwhile, KKR and KSL Capital Partners have agreed to acquire vacation company Apple Leisure from Bain Capital; a Reuters report from this summer indicated a pending sale could value Apple Leisure at more than $1.5 billion, including debt. Apple Leisure is a provider of vacation services in Mexico and the Caribbean operating a number of brands that offer hotel management services, travel agency services and a travel program. The sale is expected to close early next year.
It’s been a busy past few weeks for KKR. On top of the Apple Leisure acquisition, the firm purchased Optiv Security from Blackstone last week and is reportedly in advanced talks to acquire pharmaceutical business Capsugel in a deal that could be worth more than $5 billion.
Article by Kevin Dowd, PitchBook