Investment idea generation.


Our thoughts.

FrontFour Letter On ILG And Marriott Vacations Merger

Our conservative analysis below assumes total cost synergies of $150 million, no revenue synergies, assumes only $100mm of synergies included in the leverage calculation and excludes non-recourse securitized debt, a 6% cost of debt financing, $60 million in cash transaction expenses and is derived using current 2018 consensus street estimates for revenue and EBITDA.  As shown in the table below, and assuming the midpoint of the offer range and leverage range, and further taking into account our conservative assumptions as discussed above, a transaction is nearly 20% accretive to Marriott Vacations shareholders based on current 2018 EPS estimates.