News for the Hospitality Executive
The Pritzkers Selling $1 billion Stake in Global Hyatt
Corporation to Goldman Sachs
and Madrone Capital Partners, Affiliated with Wal-Mart Chairman Rob Walton
CHICAGO - August 29, 2007 - Tom Pritzker, Chairman of Global Hyatt Corporation, announced today that Madrone Capital Partners, a private investment firm affiliated with Rob Walton and his family, and entities affiliated with Goldman Sachs Capital Partners have agreed to invest a total of $1 billion to acquire equity securities in Global Hyatt Corporation. This investment represents a minority stake in the company and will be used primarily to provide liquidity to the Pritzker family interests that currently own Global Hyatt. Global Hyatt Corporation will be expanding the size of its Board of Directors to include the appointment of representatives from both investment groups. Greg Penner, a General Partner of Madrone Capital Partners, and Byron Trott, a Vice Chairman of Investment Banking, Goldman, Sachs & Co., will be joining the Board.
“In the three years since Global Hyatt was formed in 2005, we have been building our company into a broad based, world class participant in the hospitality industry,” said Tom Pritzker. “Consistent with previously announced plans, we are also in the process of restructuring our family’s holdings. As part of our strategic planning we considered opening up our shareholder base to an investor or investors who shared our vision and could facilitate the implementation of the company’s strategy. As we considered the criteria we would use, Rob Walton’s family interests and Goldman Sachs emerged as possessing the key attributes we sought: global awareness and presence, world-class reputation, long-term perspective and an ability to add value through ongoing engagement with the Board and management of the company.”
Pritzker continued, “The addition of these sophisticated investors with long-term horizons will allow us to further our restructuring efforts without affecting Global Hyatt’s financial capacity to grow and execute on our business plan. With this transaction, we believe we have served the interests of both the company and its shareholders. The addition of Greg and Byron to the Board provides us with individuals who bring relationships and know-how that fit squarely within our business model. While we have previously spoken about making Global Hyatt ‘public ready’ in all aspects of our reporting, controls, management and growth profile, we have no specific plans to access the public markets at this time.”
Specific details about the structure of the transaction are not being disclosed.
Rob Walton observed, “Global Hyatt has all of the ingredients necessary for long-term growth: a capable and dedicated group of associates, solid capital base, well-respected brands and a global footprint including a strong presence in the highest growth areas in the world.” Greg Penner, of Madrone Capital Partners, added, “Global Hyatt Corporation is an enduring business franchise with strong growth prospects. Our investment in Hyatt exemplifies our philosophy of investing with a long-term orientation and aligning with the very best people. The leadership team at Hyatt, led by Tom Pritzker and Mark Hoplamazian, embodies the high level of quality and integrity that we look for in our partners. We are pleased to embark on this relationship with the Global Hyatt team.”
"Global Hyatt is a premier global business that represents the best in what we look for in our prospective investments - an industry leading brand with global reach, superior growth prospects in its industry and a world class management team focused on building shareholder value," said Richard A. Friedman, Chairman of Goldman Sachs Capital Partners. "Goldman Sachs has a long and successful history of partnering with families and management in closely-held enterprises to help achieve their strategic objectives. We are thrilled to have the opportunity to work with Tom Pritzker, Mark Hoplamazian and the rest of the Hyatt team, and will commit the global resources of Goldman Sachs to support Hyatt in realizing its extraordinary growth prospects."
Global Hyatt Corporation has announced a number of exciting changes in recent months, including a re-alignment of its organizational structure to be more customer-focused, strengthening the company’s senior management team with the appointment of new global leaders of Real Estate and Development and Human Resources, entrance into the select service segment with the launch of Hyatt Place™ and Hyatt Summerfield Suites™ and the introduction of a new full-service concept in casual luxury, Andaz™.
Global Hyatt has announced that it has more than 65 hotels in the full service pipeline opening over the next three years, including 16 in Greater China. Two Andaz brand properties are slated for New York and one for London, with others under discussion elsewhere in the world including Beijing. The company also continues to build on its reputation in North America with accelerated plans for both the Hyatt Summerfield Suites and Hyatt Place brands. Hyatt Summerfield Suites recently announced that it has ten new build hotels across the United States which will join the 30 Hyatt Summerfield Suites hotels that are and will be operating by year-end 2007. At the same time, Hyatt Place announced that, with the inclusion of 20 new build hotels, the total number of new build Hyatt Place projects under development is 50 hotels and its rapidly growing portfolio should reach 120 hotels nationwide by year-end 2007.
“These two new strong investors bring their own worldwide networks of contacts and business partners, which are a perfect complement to our existing global relationships. As Global Hyatt continues to take advantage of the growth of travel in new geographies while building on our strong brand reputation, we welcome the breadth of experience that our new partners bring to the organization,” added Mark Hoplamazian, President and CEO of Global Hyatt Corporation. “We are always looking for new ways to deliver more value to our associates, our guests and our owners, and other industries can provide us with best practices that are applicable to enhancing the Hyatt experience. Our new investors know what it takes to build strong successful businesses, and they can help us with our commitment to reinforce Hyatt’s reputation as the best in class throughout the world.”
About Madrone Capital Partners
Madrone Capital Partners, a private investment firm affiliated with Rob Walton and his family, invests with a concentrated, long-term philosophy. The firm is based in Menlo Park, California.
Greg Penner is a General Partner at Madrone Capital Partners. Prior to Madrone, Mr. Penner was a Senior Vice President at Wal-Mart Stores, Inc. Previously, he was a general partner of Peninsula Capital and financial analyst at Goldman, Sachs & Co. Mr. Penner is a director of Baidu.com, 99Bill Corporation, and The Seiyu, Ltd. He received an M.B.A. from The Stanford Graduate School of Business and a B.S. from Georgetown University.
About Goldman Sachs Capital Partners
Since 1986, Goldman Sachs has raised thirteen private equity and mezzanine investment funds aggregating $56 billion of capital commitments. GS Capital Partners is the private equity vehicle through which The Goldman Sachs Group, Inc. conducts its privately negotiated corporate equity investment activities. GS Capital Partners is currently investing its GS Capital Partners VI fund. GS Capital Partners is a global private equity group with a focus on large, sophisticated business opportunities in which value can be created through leveraging the resources of Goldman Sachs.
Byron Trott is a Vice Chairman of Investment Banking for Goldman Sachs and is head of the company’s Chicago office and Midwest Region. He is also a member of the Investment Committee of the firm’s Principal Investment Area and Investment Banking Division’s Operating Committee. He is a Trustee of the University of Chicago and a Trustee of The Art Institute of Chicago, where he serves as the Chairman of the Investment Committee. Mr. Trott currently is an advisory director of Enterprise Rent-A-Car Company. He received an A.B. and M.B.A. from the University of Chicago.
About Global Hyatt Corporation
Global Hyatt Corporation, one of the world’s premier hotel companies, offers today’s travelers over 735 hotels and resorts (over 136,000 rooms) in 44 countries. The company’s affiliates own, operate, manage and franchise Hyatt branded hotels and resorts under the Park Hyatt™, Grand Hyatt™, Hyatt Regency™, Hyatt Resorts™, Hyatt™, Hyatt Place™ and Hyatt Summerfield Suites™ brands. In April 2007, Hyatt launched its newest global brand, Andaz™. Global Hyatt Corporation is also the owner of Hyatt Vacation Ownership, Inc. operator of the Hyatt Vacation Club and fractional residential properties and U.S. Franchise Systems, Inc, which franchises Hawthorn Suites and Microtel Inns and Suites. From the U.S. and Canada, reservations for any Hyatt hotel worldwide may be obtained by calling 1-800-233-1234 or logging onto www.hyatt.com.
Global Hyatt Corporation
|Also See:||Hotels Are Hot; Pritzkers Could Find Timing Right for Hyatt IPO / April 2006|