What was the base consideration for The Standardx's Bahia Principe Transaction?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Bahia Principe—During the year ended December 31, 2024, we completed the Bahia Principe Transaction (see Note 4) for €419 million of base consideration, including €60 million of deferred consideration payable at future dates. The consideration was subject to customary adjustments related to working capital, cash, and indebtedness, and we may pay additional variable contingent consideration through 2034 primarily related to the achievement of certain milestones for the development of additional hotels to be managed by the joint venture. The contingent consideration is payable at each hotel opening and is based on a multiple of stabilized base and incentive management fee revenues, and therefore, we are unable to reasonably estimate our maximum potential future consideration.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the base consideration for the Bahia Principe Transaction was €419 million. The transaction, which closed during the year ended December 31, 2024, also included €60 million of deferred consideration payable at future dates. The total consideration was subject to customary adjustments related to working capital, cash, and indebtedness.
Additionally, The Standardx may pay variable contingent consideration through 2034, primarily related to achieving certain milestones in developing additional hotels to be managed by the joint venture. These contingent payments are linked to each hotel opening and are calculated as a multiple of stabilized base and incentive management fee revenues.
Because the contingent consideration is dependent on future hotel openings and revenue performance, The Standardx states that it is unable to reasonably estimate the maximum potential future consideration. This means the final cost of the Bahia Principe Transaction for The Standardx could be significantly higher than the initial €419 million base consideration, depending on the success of future hotel developments and management fee revenues.