Hyatt plans to buy Apple Leisure Group from KKR and KSL Capital for $2.7 billion

Hyatt Hotels Corp. plans to buy resort company Apple Leisure Group from its private-equity owners for $2.7 billion.

The deal for the company, which is owned by KKR & Co. and travel-and-leisure specialist KSL Capital Partners LLC, was announced Sunday after The Wall Street Journal reported it was imminent.

The transaction is the latest sign of optimism about a return to vacation travel even as the U.S. economy continues to grapple with the coronavirus pandemic. Like many travel-related companies, Apple Leisure’s business got clobbered by virus-related lockdowns and travel bans last year, but it has rebounded as restrictions have loosened.

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For Chicago-based Hyatt, one of the world’s biggest hospitality companies, the deal would bolster its already considerable resort-management portfolio and give it one of the biggest U.S. providers of charter flights and vacation packages for travel to Mexico, the Dominican Republic, Jamaica and the Caribbean.

It also would accelerate Hyatt’s transformation, long under way, to a more asset-light business model, focusing on generating an ongoing stream of steady and predictable fees.

Apple Leisure, whose predecessor company was founded in 1969, manages the Secrets, Dreams and Breathless Resorts & Spa chains and sells vacation packages under the CheapCaribbean.com and Apple Vacations brands, among others.

Based in Newtown Square, Pa., it also offers airport transfer, tours and excursions and corporate-event planning at a variety of destinations including Mexico and the Caribbean.

KKR and KSL bought the company from Bain Capital in 2017 for an undisclosed price. Since then, Apple Leisure has done a number of acquisitions, agreeing to merge with Funjet Vacations owner The Mark Travel Corp. and inking a deal to purchase a majority share in Spain’s Alua Hotels & Resorts in 2018.

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Based in New York, KKR manages $429 billion across private equity, credit, real estate, infrastructure and insurance. The firm’s recent deals include a June agreement to take software company Cloudera Inc. private in a roughly $5.3 billion deal alongside private-equity firm Clayton Dubilier & Rice. In April, KKR signed a $5.75 billion deal to sell Bountiful Co., the maker of Nature’s Bounty vitamins, to Nestlé SA .

With offices in Denver, Stamford, Conn., London and Singapore, KSL focuses exclusively on investing in travel and leisure, including hospitality, recreation, clubs, real estate and travel services. The firm has raised over $15 billion of capital for debt and equity funds since it was founded in 2005.