KSL Capital Acquires ALG and Outrigger

Dec 30, 2016

What:
Private equity firm KSL Capital, which invests in the hospitality industry, has made two major purchases in the past month: Apple Leisure Group (ALG) and Honolulu-based Outrigger Hotels and Resorts. The Outrigger acquisition was recently completed, and the ALG transaction will close in Q1 2017. The transactions were both made at an undisclosed price.

Why It Matters:
Family-run Outrigger owns 37 properties, and ALG, founded as Apple Vacations in 1969, is one of North America’s top sellers of all-inclusive vacation packages. Because both brands have deep roots in the industry, these investments are especially significant to advisors who sell their products. Although major acquisitions can sometimes spark unease among a loyal client base, KSL says the mergers mean nothing but growth for each brand. If all goes well, the added resources KSL provides will hopefully translate to an even better experience for clients.

Fast Facts:
- KSL Capital purchased ALG from Bain Capital Private Equity.

- ALG is parent company to several travel distribution brands, including Apple vacations, Travel Impressions, CheapCaribbean.com, Unlimited Vacation Club and more.

- The Outrigger transaction includes all 37 of the brand’s portfolio of hotels, condominiums and vacation resort properties. The transaction will be complete upon shareholder approval and customary closing conditions.

- Outriggers current management team will continue to lead the company and the brand’s headquarters will remain in Honolulu.

What They Are Saying:
"Outrigger has built a unique portfolio of world-class hotels in remarkable destinations," said Marty Newburger, a partner at KSL Capital. "We are honored to have the opportunity to invest in Outrigger and further enhance its focus on providing exceptional, authentic and localized guest experiences. As we move forward with this new era for Outrigger, we are optimistic that it will continue global growth in iconic resort destinations and achieve even greater success."

"We deeply appreciate KSL’s confidence in Outrigger," said Dr. Charles Kelley, outgoing chairman of Outrigger and grandson of founders Roy and Estelle Kelley. "It was truly our family’s privilege to lead Outrigger for seven decades as we grew in Hawaii and beyond, working with the very best to create the internationally recognized brand that is Outrigger today. We are enthusiastic about the future of Outrigger under KSL’s ownership and believe we have placed it and our Outrigger ‘ohana in the right hands."

"We are pleased to be partnering with KKR and KSL for our next phase of growth," said Alex Zozaya, CEO of Apple Leisure Group. "They share our commitment to the vision of Apple Leisure Group as we continue to deliver great results to travelers, guests and hotel owners. We are extremely appreciative of Bain Capital Private Equity’s partnership and support in executing our growth mission and helping us strengthen our leadership position over the past four years."

"Nearly 25 years ago, KSL first partnered with KKR to acquire premier hospitality businesses, and we are delighted to once again partner with them to invest in Apple Leisure Group," said Richard Weissmann, a Partner of KSL. "We have spent several years searching for the right opportunity in the Caribbean, and could not be more pleased to partner with Apple Leisure Group and its talented management team and employees. With a devoted customer base and thousands of loyal members, we believe Apple Leisure Group has tremendous potential for future growth."