Choice Hotels International has entered into a formal deal to buy Radisson Hotel Group Americas’ franchising business, operations, and intellectual property for about $675 million. Choice will gain 624 hotels with over 68,000 rooms as a result of the inclusion of Radisson’s 9 brands.
The transaction was approved by Choice’s board of directors and is scheduled to conclude in the second half of 2022, subject to regulatory clearances and usual closing criteria. Choice’s current capital allocation strategy, including dividend payment policy and planned share repurchases, is not expected to alter as a result of the deal.
“Choice has a well-established history of smart acquisitions in new segments where our world-class franchising engine can spur future growth,” said Patrick Pacious, Choice’s president and CEO. “This transaction brings together two highly complementary businesses, enhancing our guest offerings in the core upper-midscale hospitality segments while extending our reach into the upper-upscale and upscale full-service segments and in higher revenue geographic markets. We are confident that guests and franchisees will significantly benefit by combining these two exceptional sets of brands.”
Pacious stated at Choice’s annual conference in early May that the company has overcome many challenges over the last three years of pandemic and economic downturn, driving new business, trying to advocate for government aid, and lowering operating costs for franchisees to exceed 2019 system-wide performance levels. He praised the franchisees of the firm.
“We are confident that Choice Hotels is the owner with the right long-term strategy, resources, and management team to successfully accelerate the growth of the Radisson business in the Americas,” González said. “Together with Choice, we will work to ensure that customers continue to experience the highest levels of service and a superior brand experience.”
Radisson Americas is happy with the acquisition, said Tom Buoy, interim CEO of Radisson Hotel Group Americas, who stepped in when previous CEO Jim Alderman stepped down in December.
“We believe that this acquisition will drive growth in a highly competitive market and enable stronger performance for our franchisees,” Buoy said.