Private equity firm Apollo Global Management LLC (NYSE: APO) agreed to acquire Diamond Resorts International Inc. (NYSE: DRII) for $2.2 billion.
Diamond Resorts is a timeshare company headquartered in Las Vegas, Nevada, with a network of more than 420 vacation destinations in 35 countries throughout the continental United States, Hawaii, Canada, Mexico, the Caribbean, South America, Central America, Europe, Asia, Australasia and Africa. the company was founded in 2007.
Apollo’s all-cash offer of $30.25 per share represents a premium of approximately 26% over Diamond Resorts’ closing share price on June 28, 2016, and a premium of approximately 58% over the closing share price on February 24, 2016, the day of Diamond Resorts’ announcement that it was exploring strategic alternatives.
David Palmer, chief executive of Diamond Resorts, said, “We have built a solid business focused on operational excellence, hospitality, and customer satisfaction, the result of which has been stellar financial results and strong cash generation. This transaction is an excellent outcome for our shareholders. Apollo values the culture of hospitality and customer service that is the legacy of our Founder and Chairman Stephen J. Cloobeck and instilled in our organization.”
The transaction will be completed through an all-cash tender offer. The board of directors of Diamond Resorts approved and adopted the merger Agreement and recommended that the company’s shareholders tender their shares in the offer.
“We are tremendously excited about the opportunity for our funds to acquire Diamond Resorts,” said David Sambur, partner at Apollo. “Stephen, David, the management team, and Diamond’s more than 8,000 team members have built an amazing customer-centric business with a great reputation that delivers award winning hospitality experiences at great value. ”
The transaction is conditioned upon satisfaction of the minimum tender condition which requires that shares representing more than 50 percent of the Company’s common shares be tendered and the receipt of certain regulatory approvals and other customary closing conditions.
There is no financing condition to completion of the tender offer and the merger. Financing is being provided by Barclays, Royal Bank of Canada, and Jefferies. PSP Investments Credit USA LLC is also providing debt financing commitments.
The transaction is currently expected to close over the next few months. At closing Diamond Resorts will become a privately held company and its common shares will no longer be listed on any public market.
Centerview Partners is serving as exclusive financial advisor to the Strategic Review Committee. Gibson, Dunn & Crutcher LLP is serving as legal advisor to the Strategic Review Committee. DLA Piper LLP served as special counsel and Katten Muchin Rosenman LLP served as antitrust counsel to the Company. Barclays and RBC Capital Markets, LLC are acting as M&A advisors to Apollo and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Apollo.
Apollo is a leading global private equity firm with offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai. The firm had assets under management of approximately $173 billion as of March 31, 2016 in private equity, credit and real estate funds. Apollo was founded in 1990 by Leon Black, chairman and CEO.