Royal Caribbean Sandals Deal Raises Valuation Questions
Royal Caribbean Sandals deal expands the group's vacation platform into all-inclusive resorts and raises valuation and financing questions for traders.
KEY TAKEAWAYS
- Royal Caribbean will buy a 50% stake in Sandals for about $3 billion, implying a $6 billion valuation.
- Companies described the price as about 10x forward EBITDA and said Morgan Stanley had committed debt financing.
- Completion expected in early 2027 and the companies said the deal would be accretive to earnings.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Royal Caribbean Group (RCL) said in a September 23, 2026 press release that it signed an agreement to form a jointly governed partnership with Sandals and Beaches Resorts, expanding its vacation platform into land-based all-inclusive resorts.
Deal Terms, Valuation, and Financing
Royal Caribbean will acquire a 50% equity interest in Sandals and Beaches Resorts for approximately $3 billion, implying an equity valuation near $6 billion. The companies described the purchase multiple as about 10 times forward EBITDA, a measure of earnings before interest, taxes, depreciation, and amortization.
The transaction integrates Sandals and Beaches’ Caribbean all-inclusive resort portfolio, which includes 20 resorts, into Royal Caribbean’s broader vacation platform. The partnership aims to accelerate resort growth and diversify Royal Caribbean’s offerings beyond cruises and private destinations.
Royal Caribbean secured committed debt financing from Morgan Stanley to fund the investment. This financing, combined with the purchase multiple, could affect the company’s near-term balance sheet and earnings as the deal progresses toward completion.
Governance of the joint venture will be shared between Jason Liberty, Royal Caribbean’s chairman and chief executive, and Adam Stewart, executive chairman of Sandals and Beaches Resorts. Stewart is expected to maintain a leadership role in the resort business. The companies said existing reservations, loyalty programs, and operations for both resorts and cruises will continue unchanged.
Completion is expected in early 2027, subject to customary approvals and closing conditions. The companies said the transaction is expected to be accretive to earnings next year.
