Hilton Grand Vacations announces $1.5bn acquisition of Bluegreen Vacations

Hilton Grand Vacations Inc. (HGV) has entered into a definitive agreement to purchase Bluegreen Vacations for $75 per share. This all-cash deal, totaling approximately $1.5 billion including net debt, is set to significantly broaden HGV’s offerings and customer reach within the vacation ownership and experiences sector.

Deal Expected to Close in the First Half of 2024

With unanimous approval from the Boards of Directors of both companies, the acquisition is anticipated to finalize in the first half of 2024, pending customary closing conditions and regulatory approvals. The current management team of HGV, led by president and CEO Mark Wang, will continue in their roles following the completion of the transaction.

Strategic Expansion and Partnership Enhancements

The purchase aims to amplify HGV’s market influence, growing its membership base and resort portfolio through the integration of Bluegreen Vacations. This acquisition is also set to enrich HGV’s lead flow with Bluegreen’s exclusive marketing partnerships, including a new 10-year agreement with Bass Pro Shops.

Mark Wang of Hilton Grand Vacations remarked on the agreement, “I’m excited to enhance the breadth and quality of our already best-in-class vacation ownership and experiences offering with the announcement of our agreement to acquire Bluegreen Vacations.”

Bluegreen Vacations Welcomes the New Chapter

Alan Levan, CEO of Bluegreen Vacations, also commented on the merger’s benefits, indicating a continuation of delivering unique vacation experiences and an increase in world-class destinations for their members and guests.

Bass Pro Shops and HGV Embark on a New Venture

In line with the acquisition, HGV disclosed a 10-year exclusive marketing agreement with Bass Pro Shops. This collaboration is expected to serve the loyal customer base of the outdoor retailer by introducing them to enhanced vacation opportunities.

Transaction Enhancing HGV’s Service Diversity

The acquisition is set to grow HGV’s member base and extend its reach within the Hilton Honors program. It will diversify and expand the company’s lead sources, capitalizing on Bluegreen Vacations’ successful strategic partnerships.

Projected Financial Benefits of the Transaction

HGV forecasts around $100 million in cost synergies within the first 24 months post-closing, alongside substantial future revenue synergies that could more than offset incremental license fees. This strategic move is poised to solidify HGV’s financial profile, supporting higher free cash flow conversion and a robust base of recurring EBITDA.

Financial and Legal Advisory on the Deal

Financial advisors for HGV include BofA Securities, and for Bluegreen Vacations, Credit Suisse and Wells Fargo. Legal counsel for HGV encompasses Alston & Bird LLP, Simpson Thacher & Bartlett LLP, and Foley & Lardner LLP, while Stearns, Weaver, Miller is serving as legal counsel for Bluegreen Vacations. Financing commitments for the transaction have been secured from Bank of America, Deutsche Bank, Barclays, and J.P. Morgan.