Marriott International, Inc. announced today that it has entered into an agreement with Gaylord Entertainment Company to acquire the Gaylord brand and hotel management company for $210 million. The transaction is conditioned on Gaylord Entertainment’s shareholders approving the company’s conversion into a real estate investment trust, which is expected in August.
If approved, Gaylord will continue to own the existing Gaylord hotels and Marriott will assume management of these properties under long-term agreements. The transaction will add four convention centers and approximately 7,800 rooms to Marriott’s portfolio.
“We are excited to add Gaylord Hotels to our brand portfolio and are thrilled Gaylord Entertainment selected us to manage their properties,” said Arne Sorenson, president and chief executive officer for Marriott International. “We have long been impressed with the hotels Gaylord has created, as well as their skill in hosting major meetings and events. This is a tremendous opportunity to advance growth and opportunity for both Marriott International and the Gaylord hotel brand.”
Gaylord hotel and convention centers include the Gaylord Opryland, Gaylord Palms, Gaylord Texan and Gaylord National. Gaylord Hotels are uniquely positioned in the group and family leisure segments with approximately two million square feet of meeting and event space.
Sorenson said that Gaylord’s everything-in-one-place properties are very attractive to group meeting planners.
Upon completion of the transaction, Marriott will operate the hotels under management agreements with an initial term of 35 years.
“We chose Marriott, a brand that is a recognized leader in the hospitality industry, due to their focus on providing the highest quality experience for both group and leisure customers,” said Colin V. Reed, chairman and CEO of Gaylord Entertainment Company. “According to a recent survey conducted on behalf of Gaylord in February of over 400 high-quality meeting planners, Gaylord ranked first in all under one-roof offerings and amenities and Marriott ranked as the number one preferred group destination provider overall due to its service standards and wide distribution.”
Marriott International expects to earn an incentive fee in its first full year of management, based on improvement in Gaylord Hotels’ profitability, and further expects the transaction to be accretive to Marriott’s earnings per share by approximately 2 cents in 2013.
The transaction is expected to close by October.