Fairfax, Virginia-based Playa Hotels & Resorts BV, a leading owner, operator, and developer of premier all-inclusive resorts, said it agreed to merge with Ft. Worth, Texas-based Pace Holdings Corp. (NASDAQ: PACE), a blank check company sponsored by private equity firm TPG. The combined company will retain the Playa name and will be a publicly listed company with an initial enterprise value of $1.75 billion.

The deal is expected to accelerate Playa’s growth strategy by providing $500 million of additional capital and access to the public markets.

The move comes three months after Playa filed a registration statement for an initial public offering.

With approximately 6,142 rooms across its 13 locations, Playa owns and operates all-inclusive resorts located on prime beachfront properties in leading destinations in the Dominican Republic, Jamaica, and Mexico. The company’s business model, which provides guests with the all-inclusive vacation experience year round, produces higher occupancy rates than competing traditional or seasonal resort structures.

In 2013, Playa entered into a strategic partnership with Hyatt to create two all-inclusive brands under the Hyatt name, Hyatt Ziva and Hyatt Zilara, of which Playa is the sole franchisee. Playa operates six Hyatt resorts across Mexico and Jamaica, one of which sits in the only private cove in Puerto Vallarta. Through its relationship with Playa, Hyatt is the first major U.S. brand to have entered the all-inclusive segment.

Playa’s management team, led by Chairman and CEO Bruce Wardinski, will continue to run the company post-transaction. Pace President and CEO Karl Peterson, along with two other members designated by Pace, will join the company’s board.

“When we formed Pace, our objective was to identify a great company that was ready to enter the public arena and had a business plan that we could help accelerate by providing insights, support, and greater access to capital,” said Karl Peterson, TPG Partner and President and CEO of Pace Holdings. “We believe that Playa is the perfect fit for this mandate. Bruce has built an exceptional company that is creating a new standard for quality and innovation in the all-inclusive resort segment. Over the years, my partners and I have witnessed first-hand his successful leadership in the hospitality space. We look forward to working with Bruce and his team to grow the company, most immediately through accessing growth capital and addressing consumer-direct sales opportunities.”

“We are thrilled to be partnering with Pace in a transaction that not only reflects the momentum that Playa has achieved throughout the last several years but also serves as a catalyst for accelerating future growth,” said Bruce Wardinski, Chairman and CEO of Playa. “I have known TPG and Karl for many years, and their operational expertise, differentiated sector insights, and track record of developing successful businesses is unparalleled. Their deep experience founding and building industry-leading companies will be extremely valuable as we look to capitalize on attractive growth prospects. Our new capital structure and our partnership with Hyatt, paired with TPG’s private equity heritage, create truly exciting opportunities. I look forward to working together to lead and grow Playa as a publicly listed company.”

“TPG has an ongoing focus on creating new ways to leverage our business-building experience, sector expertise, and investment insight to expand our platform and offer a diverse set of products to our investors,” said David Bonderman, co-Founder of TPG and Chairman of Pace. “Karl and the team did a great job leading the initiative to build Pace into a differentiated, value-added partner. Playa is a natural fit for the investment thesis behind Pace, and we look forward to working with Bruce and his team to take this business to the next level.”

Incubated in a family office, started and headquartered in Fort Worth and San Francisco, TPG now has over $74 billion under management with investment and operational teams in 17 offices around the world. Having invested in more than 400 companies, TPG has built a diverse set of asset classes, including private equity, growth equity, public equity, credit, and real estate, to help our LPs achieve their investment objectives.

The deal has been unanimously approved by the boards of directors of both Pace and Playa and is expected to close in the first quarter of 2017, subject to regulatory approvals, and approval by the shareholders of Pace.

BofA Merrill Lynch acted as exclusive financial advisor to Playa. Deutsche Bank Securities Inc. and Citigroup served as financial and capital markets advisors to Pace. Hogan Lovells acted as the legal advisor to Playa and Weil, Gotshal & Manges LLP acted as the legal advisor to Pace.

David Bonderman, co-Founder of TPG and Chairman of Pace Holdings.



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