Royal Caribbean has announced that they have reached an agreement to acquire a majority stake in Silversea Cruises, a luxury cruise line. Silversea Cruises is privately owned a luxury cruise line with six cruise ships in service to go along with three expedition ships.
Under the agreement, Royal Caribbean will acquire a 66.7% equity stake in Silversea Cruises 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. In addition, Lefebvre will qualify for an estimated contingent consideration of approximately 472,000 RCL shares, payable upon achievement of certain 2019-2020 performance metrics.
Richard D. Fain, Chairman and CEO of Royal Caribbean Cruises Ltd., gave the following statement: “Silversea is a crown jewel, and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth.
Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas.”
The strategic rationale for the partnership includes:
- Driving long-term capacity growth in the burgeoning luxury and expedition markets at a much larger scale than what Silversea would achieve independently;
- Diversifying Royal Caribbean’s portfolio and increasing its expedition offerings by adding a premiere ultra-luxury brand;
- Leveraging the global footprint of the combined companies to generate demand and increase vacation and destination options for the guests of both companies;
- Realizing significant synergies related to global market access, supply chain, purchasing power and other economies of scale.
Lefebvre said he is confident that the significant investment stake he is retaining will sizably increase its value through the growth this long-term partnership will enable.
Lefebvre and Fain also confirmed that Silversea’s CEO Roberto Martinoli will continue in his role, working with the existing Silversea management team.
Silversea, with its intimate, all-suite ships, full spectrum of global cruise offerings sailing to more than 1000 global destinations, and unique luxury expedition vessels, adds a pioneering ultra-luxury brand to RCL’s industry-leading brand lineup. RCL’s largest brand, Royal Caribbean International, is a contemporary brand focused on adventure-seeking families, Celebrity Cruises is a premium brand providing a modern luxury experience to discerning global travelers, and Azamara Club Cruises is a destination immersive brand offering luxury voyages to unique ports.
The company also operates the regional TUI Cruises and Pullmantur brands as part of long-term joint ventures. The closing is expected to be completed later in the year, subject to customary closing conditions and regulatory approvals.
