Wyndham Destinations announced the acquisition of Travel + Leisure brand and related assets from media company, Meredith Corp., for $100 million. Shares of the world’s largest vacation club and exchange company closed 7.8% higher following the news on Wednesday.
Wyndham (WYND) said that the acquisition of Travel + Leisure would include the brand’s travel clubs and its nearly 60,000 members. The company believes that the deal will broaden its reach to new leisure travel and licensing markets in the industry.
After the completion of the deal in mid-February, Wyndham will be renamed as Travel + Leisure Co. and will trade on NYSE with a new ticker symbol, TNL.
The transaction is likely to be neutral to earnings in the first year and will become earnings accretive in the second year. (See WYND stock analysis on TipRanks).
According to the terms of the deal, Meredith (MDP) will continue to operate and monetize Travel + Leisure’s media platforms, under a 30-year licensing agreement.
Following the deal, Oppenheimer analyst Ian Zaffino lifted WYND’s price target to $55 (about 12% upside potential) from $40 and maintained a Buy rating. In a note to investors, Zaffino said, “the addition of Travel + Leisure can help expand the company’s services and offerings going forward.”
Overall, the rest of the Street is firmly bullish on the stock with a Strong Buy analyst consensus backed by 4 unanimous Buys. The average price target of $47 implies downside potential of around 4.3% over the next 12 months.