What:
Royal Caribbean Cruises Ltd. (RCL) and Manfredi Lefebvre, executive chairman of Silversea Cruises, have announced that RCL will acquire a 66.7 percent equity stake in Silversea Cruises.
Why It Matters:
The partnership, which is expected to complete later this year, will allow Silversea to grow and compete in the luxury and expedition markets on a much larger scale, while also diversifying RCL’s portfolio and increasing vacation and destination choices for clients of both companies. For travel agents, this may be the perfect way to introduce clients to a new product and provide what every customer wants: more options.
Fast Facts:
- Under the agreement, RCL will acquire a 66.7 percent equity stake in Silversea based on an enterprise value of approximately $2 billion.
- The purchase price of the equity being acquired is approximately $1 billion.
- RCL plans to finance the purchase through debt.
- Lefebvre will qualify for an estimated contingent consideration of approximately 472,000 RCL shares, payable upon achievement of certain 2019-2020 performance metrics.
- According to Lefebvre, he is confident that the significant investment stake he is retaining will sizably increase its value through the growth the long-term partnership will enable.
- Silversea CEO Roberto Martinoli will continue in his role, working with the existing Silversea management team.
- For 2018, RCL reconfirmed its latest adjusted EPS guidance of $8.70 to $8.90 per share. This updated guidance does not include any potential impact from the transaction, although RCL does not expect the transaction to materially impact near-term adjusted earnings per share.
What They Are Saying:
“The Silversea investment presents an extraordinary opportunity for RCL as we seek to bring more vacation options to our guests worldwide,” said Richard Fain, CEO and chairman of RCL. “Silversea has a long track record as the leader in high-end, small-ship ultra-luxury and expedition cruising, and our stake in this company enhances our current offerings and creates additional value for our shareholders. We are pleased to welcome the world-class team at Silversea and look forward to leveraging the talents of both teams to contribute to our continued successes.”
“I am very excited about the growth opportunity this partnership with Royal Caribbean gives to Silversea and look forward to continue to steer the strategy of the leader in ultra-luxury cruising and luxury expedition,” said Manfredi Lefebvre, executive chairman of Silversea. “RCL’s financial and operational strength will allow us to grow at an unprecedented pace and will allow us to capture the burgeoning demand for ultra-luxury and expedition cruising. As a shareholder, I am confident that the large stake I am retaining in the business will increase its value at a level it could never reach if we would have remained stand-alone.”
The Details
Royal Caribbean Cruises Ltd.
www.rclcorporate.com
Silversea Cruises
www.silversea.com
