Hilton Worldwide (NYSE:HLT), a key player in the global hospitality industry, is expanding its presence in the fast-growing lifestyle hotel sector through the acquisition of the Graduate Hotels brand. In a deal worth $210 million, Hilton is purchasing Graduate Hotels from Adventurous Journeys Capital Partners (AJ Capital).
Hilton Successful Dominance In Hospitality
Established in 2014, Graduate has built a reputation for its strategic locations near college campuses. The brand has experienced rapid growth, with numerous properties across the United States and the United Kingdom. Hilton recognizes Graduate’s potential in the market, estimating its global reach could extend to around 400-500 hotels.
An important aspect of this M&A deal is that Hilton secures the global rights to the Graduate brand. As part of this agreement, Hilton will establish franchise partnerships for all existing Graduate properties as well as those in development. Concurrently, AJ Capital will assume ownership and management responsibilities for more than 35 properties through enduring agreements with Hilton.
Is HLT Stock a Good Buy?
The deal is anticipated to close in the second quarter and is projected to be immediately accretive to Hilton. Driven by a post-pandemic travel and leisure boom, Hilton’s stock price has soared by nearly 41% over the past year and an impressive 145% over the last five years.
Overall, the Street has a Moderate Buy consensus rating on Hilton Worldwide alongside an average price target of $200.54.
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