News for the Hospitality Executive
|By Tom Stieghorst, South Florida Sun-Sentinel
Knight Ridder/Tribune Business News
Jun. 1--Media and e-commerce guru Barry Diller added Interval International, a Miami-based timeshare service firm, to his growing stable of online travel concerns on Friday, paying $578 million in cash and stock.
Diller is chairman of USA Interactive, formerly USA Networks, which has recently acquired Expedia and Hotels.com. It also has a controlling stake in Ticketmaster.
USA Interactive also owns Precision Response Corp., a Miami call center firm, which it acquired in 2000 for $658 million in stock, as well as Home Shopping Network.
A typical timeshare gives a buyer a week of vacation at a resort at the same time each year for $12,000 to $15,000.
Interval makes its money not by selling timeshares, but by selling memberships that let timeshare owners swap their time with other members. Exchange services lend timeshares more appeal by giving owners flexibility and variety if, for example, they tire of their initial timeshare.
The two dominant timeshare exchanges are Interval International and Resort Condominiums International, a unit of Cendant Corp.
Interval is owned by Willis Stein & Partners, a Chicago-based private equity investment firm. USA Interactive said the $578 million price is ten times Interval's budgeted 2003 earnings before interest, taxes, depreciation and amortization, an oft-used financial benchmark that is similar to cash flow.
"Another notch in our belt of interactive services with real revenues, earnings, and strong growth," said Diller, in a statement, "one in which online migration over time is assured."
Interval employs 1,150 people at three offices in Miami-Dade County and another 550 people worldwide, according to a spokeswoman. It anticipates 2003 revenue of $220 million and EBITDA of $60 million, USA Interactive said.
Diller, a former programming whiz at ABC Television and later head of several Hollywood studios, has shifted the focus of USA Interactive in recent months from entertainment to online commerce. In December, he spun off the USA cable channel, and the company's film and television interests to a joint venture controlled by Vivendi Universal, S.A.
In 2000, USA Interactive sold Miami television station WAMI-Ch. 69, along with 12 others to Univision Communications, Inc., after its ultra-local programming format failed to catch on.
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