(Reuters) - Wyndham Worldwide Corp WYN.N will sell its European vacation rental business to private equity firm Platinum Equity for about $1.3 billion (924.21 million pounds), the U.S. hotelier said on Thursday, ending a six- month long review process for the business.
Wyndham said last August it would split into two publicly traded companies – Wyndham Hotel Group and Wyndham Vacation Ownership - and explore alternatives for the European holiday rentals business.
The review “generated strong interest from multiple parties” before the company signed a deal with Platinum Equity, Wyndham Chief Executive Officer Stephen Holmes said in a statement.
The European vacation rental business operates several local brands, including cottages.com, James Villa Holidays and Landal GreenParks, and generates about $750 million in annual revenue, Wyndham said.
The business will pay a royalty fee of 1 percent of net revenue to Wyndham’s hotel business under a 20 year agreement, for the right to use the ‘by Wyndham Vacation Rentals’ endorser brand.
The deal will allow Platinum Equity tap into the growing market for holiday rentals in Europe.
According to market research firm Technavio, the European vacation rentals market is expected to grow steadily at a compounded annual growth rate of more than 8 percent by 2022.
The spinoff of Wyndham Hotel Group remains on track for the second quarter of 2018, Wyndham said on Thursday.
Last month, Wyndham said it would buy La Quinta Holdings Inc’s LQ.N hotel operations for $1.95 billion, adding another well-known U.S. brand to its hotel business.
Wyndham said it expects to use the proceeds for general corporate purposes, which may include debt repayment and funding of its La Quinta deal.
Deutsche Bank and Goldman Sachs advised Wyndham, while Bank of America Merrill Lynch is leading the financing for Platinum Equity.
Reporting by Sanjana Shivdas and Arunima Banerjee in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty