Host Hotels & Resorts Inc. has closed on the previously announced agreement to sell its 33% interest in the European joint venture to its partners. The gross asset value of its interest is approximately €700 million and equates to an EBITDA multiple of 17x on 2018 forecasted results.
After accounting for fund level debt, net proceeds to the company will be €435 million, according to a prepared statement. The company will use a portion of the proceeds to repay approximately €207 million draw on the credit facility.
“The closing of this sale represents the successful completion of one of my key initiatives set early on in my tenure as CEO to focus our attention back to the US, where we have the greatest scale and competitive advantage,” says James F. Risoleo, President and Chief Executive Officer.
He adds that “This sale signifies the end of a successful platform at an attractive price and we are grateful to our partners for helping to build a strong business in Europe. We can now focus our attention on our investment activity in the U.S. as less than 2% of our EBITDA will come from hotels outside the country with only two hotels in Canada and three hotels in Brazil.”
According to Risoleo, “The proceeds continue to strengthen our investment grade balance sheet and enhance our ability to make strategic investments that ultimately drive long-term value creation for our stockholders.”