USA Interactive to Acquire Interval International From Willis Stein & Partners and Other Investors
Leading Timeshare Exchange Company to Complement USA's Interactive Commerce Portfolio
New York, NY--USA Interactive
Miami-based Interval is one of the world's leading membership-services companies, providing timeshare exchange and other value-added programs to its timeshare-owner consumer members and resort developers. The combination of long-term relationships with developers and annual membership-based revenues provides Interval with strong recurring earnings.
Interval joins USA's formidable interactive commerce portfolio and enhances USA's growing dynamic exchange and interactive travel businesses, which include controlling interests in Ticketmaster TMCS, which operates and Citysearch; Expedia, Inc. EXPE; and Hotels.com ROOM; as well as TV Travel Group and the forthcoming U.S. cable travel network.
Through this acquisition, Interval will be able to draw from USA's vast experience in advancing the online migration of traditional businesses, specifically exchange services in the areas of ticketing and travel, and Interval's business model is conducive to significant online expansion. In addition to leveraging USA's online expertise, Interval will be able to use USA's ticketing and local information services to create new benefits programs for its members. USA's companies will benefit through travel packages that will utilize resort inventory from Interval and its developer clients.
"Another notch in our belt of interactive services with real revenues, earnings, and strong growth - one in which online migration over time is assured - and one where many of our current services interrelate providing all kinds of new opportunities for each other," said Barry Diller, Chairman and Chief Executive Officer, USA Interactive. "We welcome the expertise of Interval's excellent management team, led by its CEO Craig Nash, into our USA Interactive group of companies."
"We are excited about the potential that leveraging USA Interactive's unique assets and distribution channels holds for the future of timesharing and our company," said Craig M. Nash, Chairman and Chief Executive Officer of Interval. "As a strategic component of USA's transaction-based services, we will continue to complement our developer clients' business while adding even greater value to our consumer member families."
Interval derives revenues primarily from fees paid by consumers and developers for membership, exchange, reservation services and other travel related products, and does not build or sell timeshare properties. Typically, a timeshare owner purchases access to a fully furnished condominium for one week per year in perpetuity. The timeshare appeal is that consumers can purchase future vacations at current prices and maintain the rewards of a second home while eliminating the burden of year-round ownership. The average price of a timeshare is approximately $15,000.(a)
Vacation exchange adds flexibility to the timeshare experience and has been a key factor in driving the growth of the industry. Through Interval, timeshare owners can trade the vacation week they own for a different week or resort. Consumers consistently cite the ability to exchange as very important to the timeshare purchase decision.
Interval also provides programs designed to complement its resort developer clients' efforts through a broad range of marketing, sales, and operational services.
It is expected that the transaction will be completed in the third quarter of this year, subject to customary regulatory approvals, and that Interval's management team will continue to run the company.
About Timesharing(a)
The timeshare business is the fastest-growing segment of the hospitality industry. Globally, new purchases of timeshares approach $7 billion annually, with over 5 million households owning at more than 5,000 resorts. In the U.S. alone, 3.2 million families currently own timeshare, taking some 4 million vacations at 1,800 resorts.
Timesharing has demonstrated its resiliency during past periods of economic downturn and international tension. Despite the post-September 11 impact on tourism, the industry's performance indicates a continuation of strong usage and exchange activity.
About USA Interactive
USA Interactive USAI, via the Internet, the television, and the telephone, engages in the worldwide business of interactivity across electronic retailing, travel services, ticketing services, personals services, local information services, and teleservices. USA is comprised of HSN; Expedia, Inc. EXPE; Hotels.com ROOM; TV Travel Group; Ticketmaster TMCS, which operates and Citysearch; Precision Response Corporation; Electronic Commerce Solutions; and Styleclick IBUYA.
About Interval International
For more than 25 years, Interval International has led the vacation ownership industry with innovative products and the highest levels of quality, service, and value. The company has attracted the leading hospitality brands and independent developers to its global network of more than 1,900 resorts in 75 countries. With its international headquarters located in Miami, Florida, Interval serves its developer clients and over 1.3 million members through 28 offices in 19 countries and employs approximately 1,700 people worldwide.
About Willis Stein & Partners
Willis Stein & Partners is a leading private equity investment firm specializing in investments in profitable, well-managed, and growing businesses targeting the consumer products and services, media, telecommunications, business services, manufacturing, and health care industries. The principals of Willis Stein have made investments in 40 companies and currently manage approximately $2.9 billion of equity capital.
Important Disclosures
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include the information relating to possible or assumed future results of operations of USA and its subsidiaries and Interval, including those preceded by, followed by or that include the words "believes," "could," "projects," "budgets," "estimates," "intends," "expects," "anticipates" or similar expressions. These statements reflect the current views of USA and Interval with respect to future events, and are based on information currently available to USA and Interval. These forward-looking statements are subject to risks, uncertainties and assumptions that may affect the operations, performance, development and results of USA's and its subsidiaries' and Interval's business. The following important factors, in addition to those described in USA's and its subsidiaries' filings with the Securities and Exchange Commission, could affect the future results of USA and Interval and the other subsidiaries of USA described in this press release, and could cause those results to differ materially from those expressed in the forward-looking statements: material adverse changes generally or in economic conditions in the markets served by our businesses; future regulatory actions and conditions in our businesses' operating areas; competition from others; successful integration of our divisions, including recently acquired businesses; product demand and market acceptance; the ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the ability to expand into and successfully operate in foreign markets; and obtaining and retaining key executives and employees. You are cautioned not to place undue reliance on these forward-looking statements, which are made as of the date of this press release. USA and Interval undertake no obligation to update or revise the forward-looking statements contained in this press release, whether as a result of new information, future events or any other reason.
