Playa Hotels & Resorts Expansion

Playa Hotels & Resorts To Go Public

Playa Hotels & Resorts and Pace Holdings Corp. Announce Business Combination

Playa Hotels

Playa Hotels & Resorts B.V. announced today that it has entered into a definitive business combination agreement with Pace Holdings Corp. (NASDAQ:PACE), a special-purpose acquisition company sponsored by an affiliate of TPG. The combined company will retain the Playa name and will be a publicly listed company with an anticipated initial enterprise value of approximately $1.75 billion. The transaction will be a catalyst to accelerate Playa’s growth strategy by providing $500 million of additional capital and access to the public markets to strengthen its balance sheet, pursue acquisitions, and enhance distribution — all furthering the company’s leading position in an emerging, high-growth sector.

Offering 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.”

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“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.”

This transaction provides the combined company with access to the broader network, resources, and operational expertise of leading global alternative asset firm TPG. Since inception, the firm has been actively engaged in the travel and leisure sector, from its founding investment in Continental Airlines to its partnerships with innovative industry disruptors such as Airbnb. Throughout their tenure at TPG, the members of Pace’s management team have helped create innovative new companies such as discount travel website Hotwire. They have also helped lead the firm in successfully sponsoring companies in public markets, including leading travel technology and software provider Sabre and global cruise ship operator Norwegian Cruise Line.

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.

Key Transaction Terms

The transaction will be effected pursuant to the Transaction Agreement entered into by and among Playa, Pace, New PACE Holdings Corp. and Porto Holdco B.V. (the “Company”), pursuant to which the Company will be the surviving company. Immediately prior to the consummation of the transaction, additional investors, including affiliates of TPG, will purchase ordinary shares of Pace in a private placement. The majority of the $50 million of incremental equity capital commitment comes from two institutional investors with the balance being committed by members of Pace management and its affiliates and their travel and technology network. After giving effect to any redemptions by the public stockholders of Pace, the balance of the approximately $450 million in cash held in Pace’s trust account, together with approximately $50 million in private placement proceeds, will be used to pay transaction expenses and repay a portion of Playa’s outstanding preferred shares in the amount of approximately $346 million. Following the consummation of the transaction, the Company’s ordinary shares will be listed on the Nasdaq Capital Market.

The consideration payable to the Playa shareholders will consist of Company common shares and warrants to purchase Company common shares.

In order to facilitate the transaction, Pace’s sponsor has agreed to the cancellation of 3,750,000 founder shares and 7,333,333 founder warrants (for one third of a share). In addition, the Playa shareholders and Pace’s sponsor will be issued earnout warrants that will be exercisable for Company common shares upon the achievement of certain Company stock price thresholds.

The transaction 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 the receipt of certain regulatory approvals, and approval of the transaction by the shareholders of Pace.

Playa Hotels & Resorts B.V. is a leading owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. Playa owns a portfolio consisting of 13 resorts (6,142 rooms) located in Mexico, the Dominican Republic, and Jamaica. Playa owns and manages Hyatt Zilara and Hyatt Ziva Cancun, Hyatt Ziva and Hyatt Zilara Rose Hall Jamaica, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos. The company also owns and operates three resorts under Playa's brands, THE Royal and Gran, as well as five resorts in Mexico and the Dominican Republic that are managed by a third party.



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