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Hilton Grand Vacations gets $2.8 billion financing commitment
By Sara Rosenberg
New York, March 10 – Hilton Grand Vacations Inc. has received a commitment for $2.8 billion of financing to help support its acquisition of Diamond Resorts International Inc., according to a company presentation.
BofA Securities, Deutsche Bank and Barclays provided the debt commitment.
Proceeds will be used to refinance existing debt in connection with the acquisition, including senior notes at Hilton Grand Vacations and notes at Diamond Resorts.
Under the agreement, Diamond Resorts is being purchased from Apollo Global Management Inc. and Reverence Capital Partners for 34.5 million shares of Hilton Grand Vacations common stock. The transaction is valued at $1.4 billion.
Upon closing, existing Hilton Grand Vacations shareholders will own about 72% of the combined company and the Apollo Funds will own around 28% of the combined company.
Pro forma leverage will be 6.5x but is expected to return to below 3x within 24 months through significant cash flow generation.
Closing is targeted for the summer, subject to customary conditions, regulatory approvals and shareholder approval.
Hilton Grand Vacations is an Orlando, Fla.-based timeshare company. Diamond Resorts is a timeshare operator.
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