The owners of Avendra LLC signed a binding agreement to sell the hotel procurement and hospitality supplies company to Aramark for $1.35 billion, Marriott International Inc. said in a release.
Avendra's founding shareholders are Marriott, Hyatt Hotels Corp., AccorHotels, InterContinental Hotels Group Plc and ClubCorp, who expect to receive cash proceeds totaling roughly $1.18 billion, following the redemption of participation rights, transaction costs, and the repayment of Avendra's outstanding debt.
Marriott said it expects to receive roughly $650 million for its 55% interest in Avendra, while Hyatt, separately, said it expects to receive net cash proceeds of $210 million.
Avendra was founded in 2001 from a merger of Marriott's North American procurement division with the procurement businesses and purchasing power of the other founding shareholders, according to the release.
Marriott has entered into a five-year procurement service agreement with Aramark as part of the purchase agreement, on behalf of its managed hotel systems in the Americas. Marriott said the deal will not have a material effect on its financial results but is expected to benefit owners and franchisees of its hotels. Marriott's proceeds from the sale will be used over time for the hotels in its system.
The buyer, Aramark, provides food, facilities and uniforms for a variety of industries including educational institutions, hospitals, stadiums, workplaces and convention centers, among others, according to its website.
Aramark is also buying AmeriPride Services Inc., a uniform and linen rental and supply company in the U.S., for $1.0 billion, not including an adjustment for expected tax benefits, it said in a release.