In a first for the destination club industry, Ultimate Escapes is planning to be the first club to have a public listing of its shares and to be subject to all the reporting and transparency requirements that come with this public listing.
This listing is happening through a transaction with a currently listed SPAC ("Special Purpose Acquisition Company") or sometime called a "blank check" or "cash shell" company - a company specifically formed purely to acquire other companies. This transaction will mean that Ultimate Escapes shares are then traded on the NYSE Amex exchange.
The public company that is combining with Ultimate Escapes is currently called Secure America Acquisition Corporation ("SAAC") (NYSEAMEX: HLD).The Merger
The planned closing date for this transaction is October 29, 2009. There are a few key things to happen before then, including:
- Ultimate Escapes and Private Escapes have to complete their previously announced merger (or "acquisition" as termed in the documents)
- At least 70% of the SAAC public shareholders have to vote for the overall transaction with Ultimate Escapes
The best thing to come out of all this for members and prospective members of Ultimate Escapes, is that the destination club will be subject to NYSE Amex disclosure requirements as a public company.
They have already filed lots of information with the SEC as part of this process of becoming a public company. These filings and disclosures have included:
- Their prior and prospective financial results as shown below:
Revenue 15.1 29.1 44.5 55.1 68.0 EBITDA -14.3 -1.2 19.0 23.0 32.0 Net Income -23.5 -15.3 4.0 9.9 16.4
- Property, Debt & Cash. The clubs owned homes were recently valued at $167m in appraisals by their primary lender (Capital Source), and the club has debt of $126m.
- After the club goes public it will have at least $20m in cash from the current SPAC, and so is gaining immediate access to cash to help fund it's growth.
- Their future growth areas and plans include:
- global expansion in Europe and Asia
- new club offerings and plans equity club offering points based membership plans
- partnerships/joint ventures with luxury brands and hospitality REITS
- "Private Label" offerings with resort and hospitality brands
- Occupancy levels, showing the amount of time during the year that the clubs homes are occupied by members. This is an important measure for prospective members since if it gets too high it means the availability of homes will be reduced. In 2008 the occupancy was at a respectable 57%, and is estimated to be 60% in 2009.
At the completion of its pending acquisition of Private Escapes, Ultimate Escapes' portfolio will consist of more than 130 club properties in 45 destinations worldwide, operating three distinct luxury club categories: Elite Club, Signature Club, and Premiere Club, which target club properties with $3.0 million, $2.0 million and $1.0 million average home values, respectively. In addition, the Ultimate Collection offers club members access to more than 140 4- and 5-star independent luxury hotels in more than 100 major cities and resorts in Europe, the Middle East, Asia, Africa, South America and North America. Through its Ultimate Reciprocity Program, Ultimate Escapes also provides club members with reciprocity access to participating luxury fractional and private resort club properties.
Overall this is a good move for Ultimate Escapes and it's members and it will be nice to see a publicly quoted destination club.