by Brian Major
Last updated: 12:00 AM ET, Fri March 16, 2018
Pace Holdings' December 2016 purchase of Playa Hotels & Resorts not only took the latter company public but also provided the all-inclusive resort operator with an immediate infusion of $500 million in operating capital.
One year later, it's clear where a large chunk of the funds was spent. Earlier this month, Playa sealed an agreement to purchase five large resorts in the booming tourist district between Montego Bay and Ocho Rios, Jamaica.
And this week Playa executives celebrated the company's first year on the Nasdaq exchange (under the "PLYA" symbol), by simultaneously asserting an aggressive expansion plan.
"We're going to grow," said Bruce Wardinski, Playa's chairman and CEO. "We're going to consolidate in the all-inclusive space and we're going to be the number one all-inclusive company. That's our goal."
Playa's combination with Pace not only provided the resort operator with additional funding but "access to the public markets," enabling Playa to pursue acquisitions, Wardinski said.
One year later, officials have followed through, converting two existing hotels in Cancun and Playa del Carmen, Mexico to launch the new Panama Jack resort brand; buying the luxury Sanctuary resort in the Dominican Republic's Cap Cana development; and now acquiring more than 1,200 rooms in Jamaica via its $100 million agreement with Sagicor.
The most recent purchase "provides Playa with multi-year built-in growth opportunities," said Wardinski, and indeed, Playa instantly becomes a major Jamaican all-inclusive resort operator via its deal with Sagicor.
The acquisition includes five all-inclusive resorts: the 489-room Hilton Rose Hall resort, the 268-room Jewel Runaway Bay resort, the 250-room Jewel Dunn's River resort, the 225-room Jewel Paradise Cove and the Jamaica Grande Palmyra.
The agreement also includes two adjacent, developable oceanfront sites, all located on Jamaica's North Coast. Playa already owns and operates the Hyatt Zilara Rose Hall and Hyatt Ziva Rose Hall resorts, also located in Montego Bay.
In exchange for the properties, former Jewel owner Sagicor will receive 20 million shares of Playa common stock and $100 million in cash. Playa will nominate two Sagicor appointees for election to Playa's board of directors upon the transaction's consummation.
"Clearly if we weren't a public company we wouldn't have been able to structure a deal like this," said Kevin Froemming, Playa's chief marketing officer and executive vice president. "Being a public company allows us to be very flexible."
Within one year of the public offering, said Froemming, Playa has "launched the Panama Jack brand from a startup, converted two hotels, signed a major contract with for the five-star-plus property in Cap Cana and added 1,200 rooms in Jamaica thorough [the] acquisition with Sagicor. I would say we're off to a great start. For us, this is a brilliant opportunity and we are really excited."
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