What is the impact of the Bahia Principe acquisition on The Standardx's future revenues?

According to The Standardx's 2025 Franchise Disclosure Document, the acquisition of Bahia Principe includes management and hotel services agreements for operating hotels and the Bahia Principe trade name. It also contemplates the future management of undeveloped Bahia Principe Hotels & Resorts-branded properties. However, for the period from the acquisition date through December 31, 2024, the total revenues and net income attributable to Bahia Principe were insignificant. This suggests that while the acquisition is expected to contribute to future revenues, its immediate impact was minimal. The Standardx expects growth opportunities by expanding its all-inclusive resort offerings and destination management services as well as synergies through its management of and licensing of the Bahia Principe brand to the Unlimited Vacation Club business. At December 31, 2024, The Standardx had not completed the assignment of goodwill to reporting units due to the close proximity of the closing date and their year end. The joint venture increases The Standardx's all-inclusive portfolio, giving guests and loyalty program members more opportunities to experience all-inclusive travel. In conjunction with the transaction, The Standardx entered into various agreements with the joint venture and its related parties to provide certain commercial and management support services to the joint venture and to support the growth of the Bahia Principe brand and the operation of the Bahia Principe Hotels & Resorts-branded properties.

The Standardx acquired 50% of the outstanding shares of Management Hotelero Piñero, S.L. The joint venture, which is a VIE, owns the Bahia Principe brand and manages Bahia Principe Hotels & Resorts-branded properties. The Standardx has the power to direct the activities that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE and therefore, they are the primary beneficiary. The Standardx consolidates the operating results and financial position of this VIE in their consolidated financial statements within their management and franchising segment.

The acquisition was completed during the year ended December 31, 2024, for €419 million of base consideration, subject to customary adjustments. This includes €60 million of deferred consideration payable at future dates. Additional variable contingent consideration may be paid through 2034, related to the achievement of certain milestones for the development of additional hotels to be managed by the joint venture. These payments are based on a multiple of stabilized base and incentive management fee revenues, making it difficult to reasonably estimate the maximum potential future consideration. The Standardx paid cash of €359 million (approximately $374 million) and accounted for the transaction as a business combination. A $58 million deferred consideration liability and a $33 million contingent consideration liability were recorded on The Standardx's consolidated balance sheet. The fair values were estimated using discounted future cash flow models, including assumptions and judgments regarding discount rates and the probability of achieving hotel development milestones.