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Choice Hotels (CHH) Set to Buy Radisson Hotel Group Americas
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Choice Hotels International, Inc. (CHH - Free Report) has reached an agreement to acquire the franchise business, operations and intellectual property of Radisson Hotel Group Americas. The value of the deal stands at nearly $675 million. The deal is likely to be sealed in the second half of 2022.
The deal includes 10 Radisson Blu hotels, 130 Radisson hotels, nine Radisson Individuals, one Park Plaza hotel, four Radisson RED hotels, 453 Country Inn & Suites by Radisson and 17 Park Inn by Radisson hotels, as well as the Radisson Inn & Suites and Radisson Collection brands.
The addition of 624 hotels with more than 68,000 rooms will expand Choice Hotels’ footprint in the upscale and core upper-midscale hospitality segments, mostly in the U.S. West Coast as well as the Midwest. The acquisition will expand the company’s customer base in the upscale segments.
Patrick Pacious, president and CEO of Choice Hotels, said, “This transaction brings together two highly complementary businesses, enhancing our guest offerings in the core upper-midscale hospitality segments, while extending our reach into the upper upscale and upscale full-service segments and in higher revenue geographic markets. We are confident that guests and franchisees will significantly benefit by combining these two exceptional sets of brands.”
The acquisition will boost the company’s RevPAR as the Radisson brands mostly have larger room counts, which are situated in higher RevPAR markets. Radisson Hotel Group aims to double its portfolio in EMEA and APAC markets by 2025.
Image Source: Zacks Investment Research
Stock Performance
In the past year, CHH’s shares have lost 1.2% compared with the industry’s decrease of 12.7%.
The Zacks Rank #2 (Buy) company’s riveting growth potential depends on continued expansion of its brands. In fact, the company’s portfolio of well-segmented brands is evidently getting stronger. With continuous enhancement of the mid-scale brand, acquisition of the WoodSpring brand, and transformation and advancement of the Comfort and Cambria brands, Choice Hotels is poised for growth.
The Zacks Consensus Estimate for CVEO’s 2022 sales and earnings per share (“EPS”) suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.
Bluegreen Vacations carries a Zacks Rank #2. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has gained 33% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.
Funko carries a Zacks Rank #2. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have lost 6% in the past year.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.
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Choice Hotels (CHH) Set to Buy Radisson Hotel Group Americas
Choice Hotels International, Inc. (CHH - Free Report) has reached an agreement to acquire the franchise business, operations and intellectual property of Radisson Hotel Group Americas. The value of the deal stands at nearly $675 million. The deal is likely to be sealed in the second half of 2022.
The deal includes 10 Radisson Blu hotels, 130 Radisson hotels, nine Radisson Individuals, one Park Plaza hotel, four Radisson RED hotels, 453 Country Inn & Suites by Radisson and 17 Park Inn by Radisson hotels, as well as the Radisson Inn & Suites and Radisson Collection brands.
The addition of 624 hotels with more than 68,000 rooms will expand Choice Hotels’ footprint in the upscale and core upper-midscale hospitality segments, mostly in the U.S. West Coast as well as the Midwest. The acquisition will expand the company’s customer base in the upscale segments.
Patrick Pacious, president and CEO of Choice Hotels, said, “This transaction brings together two highly complementary businesses, enhancing our guest offerings in the core upper-midscale hospitality segments, while extending our reach into the upper upscale and upscale full-service segments and in higher revenue geographic markets. We are confident that guests and franchisees will significantly benefit by combining these two exceptional sets of brands.”
The acquisition will boost the company’s RevPAR as the Radisson brands mostly have larger room counts, which are situated in higher RevPAR markets. Radisson Hotel Group aims to double its portfolio in EMEA and APAC markets by 2025.
Image Source: Zacks Investment Research
Stock Performance
In the past year, CHH’s shares have lost 1.2% compared with the industry’s decrease of 12.7%.
The Zacks Rank #2 (Buy) company’s riveting growth potential depends on continued expansion of its brands. In fact, the company’s portfolio of well-segmented brands is evidently getting stronger. With continuous enhancement of the mid-scale brand, acquisition of the WoodSpring brand, and transformation and advancement of the Comfort and Cambria brands, Choice Hotels is poised for growth.
Other Key Picks
Some other stocks in the Consumer Discretionary sector that investors can consider are Civeo Corporation (CVEO - Free Report) , Bluegreen Vacations Holding Corporation and Funko, Inc. (FNKO - Free Report) .
Civeo sports a Zacks Rank #2 at present. The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have gained 61.3% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CVEO’s 2022 sales and earnings per share (“EPS”) suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.
Bluegreen Vacations carries a Zacks Rank #2. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has gained 33% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.
Funko carries a Zacks Rank #2. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have lost 6% in the past year.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.