What intangible assets did The Standardx acquire in the Bahia Principe acquisition?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
The acquisition includes management and hotel services agreements for operating hotels and the Bahia Principe trade name. In addition, the acquisition contemplates the future management of undeveloped Bahia Principe Hotels & Resortsbranded properties. For the period from the acquisition date through December 31, 2024, total revenues and net income attributable to Bahia Principe were insignificant.
Our consolidated balance sheet at December 31, 2024 reflects preliminary estimates of the fair value of the assets acquired, liabilities assumed, and noncontrolling interest in the entity based on available information as of the acquisition date. The fair values of intangible assets acquired were estimated using either discounted future cash flow models or the relief from royalty method, both of which include revenue projections based on the expected contract terms and long-term growth rates, which are primarily Level Three assumptions. The fair value of the noncontrolling interest related to the equity interests in the VIE held by our venture partner was estimated based on 50% of enterprise value of the entity. The remaining assets and liabilities were recorded at their carrying values, which approximate their fair values.
We will continue to evaluate the contracts acquired and the underlying inputs and assumptions used in our valuation of assets acquired, liabilities assumed, and the noncontrolling interest in the entity. Accordingly, these estimates, along with any related tax impacts, are subject to change during the measurement period, which is up to one year from the date of acquisition.
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the acquisition of Bahia Principe included management and hotel services agreements for operating hotels and the Bahia Principe trade name. The acquisition also contemplates the future management of undeveloped Bahia Principe Hotels & Resorts-branded properties. The fair value of the intangible assets acquired were estimated using either discounted future cash flow models or the relief from royalty method. These methods include revenue projections based on the expected contract terms and long-term growth rates.
The consolidated balance sheet at December 31, 2024, reflects preliminary estimates of the fair value of the assets acquired, liabilities assumed, and noncontrolling interest in the entity based on available information as of the acquisition date. The company will continue to evaluate the contracts acquired and the underlying inputs and assumptions used in its valuation of assets acquired, liabilities assumed, and the noncontrolling interest in the entity. These estimates are subject to change during the measurement period, which is up to one year from the date of acquisition.
Goodwill from the Bahia Principe acquisition is attributable to growth opportunities The Standardx expects to realize by expanding its all-inclusive resort offerings and destination management services. It also includes synergies expected through the management and licensing of the Bahia Principe brand to the Unlimited Vacation Club business. The goodwill is not tax deductible, and as of December 31, 2024, The Standardx had not completed the assignment of goodwill to reporting units.