BETHESDA, MD—Marriott International, Inc. has signed definitive agreements to acquire Canada’s Delta Hotels and Resorts brand, management and franchise business from Delta Hotels Limited Partnership, a subsidiary of British Columbia Investment Management Corp. (bcIMC) for approximately $135 million.
The Delta brand comprises a range of hotels and resorts with 38 hotels and 10,000 rooms in more than 30 cities across Canada, including its flagship Delta Toronto.
When completed, the transaction will increase Marriott’s distribution in Canada to more than 120 hotels and 27,000 rooms, making Marriott the largest full-service hotel company in Canada, according to the company.
Arne Sorenson, Marriott’s president/CEO, stated, “With this acquisition, we are continuing our focus on building our brand portfolio and growing in attractive regions outside the U.S. Combining the strong Delta brand with Marriott’s hotel development expertise will accelerate growth of the brand in Canada and in other markets around the world.”
David Grissen, group president overseeing The Americas for Marriott International, stated, “At completion, this transaction will propel Marriott to a leading position in Canada. Canada represents the largest international source market for our hotels in the United States, and the integration of Delta into Marriott’s 4,100-plus hotel global portfolio will provide new travel opportunities for both Delta and Marriott customers. We expect integrating Delta into Marriott’s systems, sales engines, Marriott.com, and the more than 49 million member Marriott Rewards loyalty program will create meaningful operational synergies for owners and franchisees.”
Marriott is acquiring the Delta management and franchise business, as well as the Delta brand and related intellectual property. At stabilization, after realizing certain operating synergies, Marriott expects the purchase price to be approximately 10 times annualized earnings before interest, taxes, depreciation and amortization (EBITDA).
Affliates of British Columbia Investment Management Corp. own 13 Delta hotels (and one under development) and will sign new 30-year management agreements with Marriott for these properties. Third parties own the other 25 Delta hotels; 15 are managed by Delta and 10 are franchised. In total, five managed hotels (approximately 1,100 rooms) are under development.
Assuming receipt of necessary approvals, the parties expect to close the transaction in second quarter.