Diamond Resorts International Eliminates External Management Structure with Hospitality Management and Consulting Service
January 06 2015 - 4:05PM
Business Wire
- HM&C Becoming a Wholly-Owned
Subsidiary of Diamond Resorts International –
- Diamond Resorts also Acquiring Exclusive
Marketing Rights at Las Vegas Location from Chairman Stephen J.
Cloobeck -
Diamond Resorts International, Inc., (NYSE: DRII) announced
today that it has entered into an agreement to eliminate its
external management structure with Hospitality Management and
Consulting Service, LLC (“HM&C”), effective January 1,
2015.
As part of the agreement, Diamond Resorts is acquiring the
HM&C entity for a de minimis amount, and as a result, HM&C
is becoming a wholly-owned and consolidated subsidiary of Diamond
Resorts. In addition, the Company has agreed with Stephen Cloobeck,
founder and Chairman of Diamond Resorts and previous controlling
owner of HM&C, to buy out the remaining term of Mr. Cloobeck’s
services agreement with HM&C at a substantial discount. Diamond
also agreed to acquire from Mr. Cloobeck certain exclusive
marketing rights in a high traffic retail complex adjacent to the
Company’s Polo Towers managed resort on the Las Vegas Strip. The
Company will pay Mr. Cloobeck a total of $16.5 million in
connection with these transactions.
In connection with these agreements, Mr. Cloobeck will be the
Non-Executive Chairman of the Board at least through December 31,
2017, so long as he remains a director of the Company. The Company
has agreed to pay to him a director's fee and health insurance
coverage during his tenure as Chairman. Mr. Cloobeck remains the
Company’s largest stockholder.
“We are pleased to have reached this agreement, which,
commencing immediately, creates a more transparent management and
compensation structure that is in line with best practices,
simplifies certain aspects of our financial reporting, and
maintains a cost structure that is beneficial to our shareholders,”
stated David F. Palmer, President and Chief Executive Officer. “We
are also pleased to have secured control, at an attractive price,
over the marketing rights at a very strategic location next to one
of our key sales centers at our popular Polo Towers resort. We
appreciate Stephen’s continued support of the Company and look
forward to his ongoing insight and commitment to hospitality as
Chairman.”
The transactions announced today were reviewed and unanimously
approved by the audit committee of the Board of Directors, which
engaged independent advisors, including a nationally recognized
independent valuation service provider, and by the disinterested
members of the full Board of Directors.
Separately, effective as of December 31, 2014, Alan
Bentley, Executive Vice President and Chief Financial Officer of
Diamond Resorts, has withdrawn as a partner of Mackinac
Partners, LLC, a financial advisory firm that provides consulting
services to the Company.
About Diamond Resorts International®
Diamond Resorts International® has an ownership base of over
515,000 members. With a worldwide network of 313 vacation
destinations located in 34 countries throughout the continental
United States, Hawaii, Canada, Mexico, the Caribbean, Central
America, South America, Europe, Asia, Australia and Africa, we
provide guests with choices and flexibility as they design their
dream vacation, whether they're traveling an hour away or around
the world. Our hassle-free, relaxing vacations give guests a truly
memorable experience every time, for a lifetime.
Diamond Resorts International® manages vacation ownership
resorts and sells vacation ownership points that provide our
members with access to 93 managed resorts, 214 affiliated
properties and six cruise itineraries through THE Club® at Diamond
Resorts International®. To learn more, visit
www.DiamondResorts.com.
Media:Diamond Resorts International, Inc.Stevi WaraTel:
1.702.823.7069; Fax:
1.702.684.8705media@DiamondResorts.comorInvestor:Sloane &
CompanyErica BartschTel: 1.212.446.1875ebartsch@sloanepr.com
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