Royal Caribbean to invest in Silversea Cruises.

Royal Caribbean is investing in Silversea Cruises.

Royal Caribbean To Invest In Silversea Cruises

PURCHASE OF 67 PERCENT STAKE WILL PROPEL THE GROWTH OF THE LEADING LUXURY AND EXPEDITION CRUISE BRAND

"CROWN JEWEL" PARTNERSHIP STRENGTHENS SILVERSEA FUTURE AND RCL BRAND LINEUP

Silversea leaders stay on to guide strategy; significant synergies expected

MIAMI, June 14, 2018 /PRNewswire/ -- Royal Caribbean Cruises Ltd. (NYSE: RCL) and Manfredi Lefebvre D'Ovidio today announced an agreement for RCL to acquire a stake in privately-owned Silversea Cruises, bringing together two companies with bold, long-term visions for the cruise industry.

Under the agreement, Royal Caribbean will acquire a 66.7% equity stake in Silversea Cruises based on an enterprise value of approximately $2 billion. The purchase price of the equity being acquired is approximately $1 billion. RCL plans to finance the purchase through debt. In addition, Lefebvre will qualify for an estimated contingent consideration of approximately 472,000 RCL shares, payable upon achievement of certain 2019-2020 performance metrics.

"Silversea is a crown jewel, and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth," said Richard D. Fain, Chairman and CEO of Royal Caribbean Cruises Ltd. "Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas."

Fain added: "We are proud to welcome aboard Manfredi Lefebvre, a visionary leader whose high standards and history of innovation we deeply respect. Manfredi will remain Executive Chairman of Silversea, continuing to lead its strategy long term."

"This partnership will bolster the growth of this exceptional brand founded by my father," said Lefebvre. "I have always been kindred spirits with Richard and we share a vision of offering excellence and leadership to our guests. This new partnership gives Silversea the opportunity to accelerate the growth of the most successful luxury and expedition cruising brand in the world."

The strategic rationale for the partnership includes:

• Driving long-term capacity growth in the burgeoning luxury and expedition markets at a much larger scale than what Silversea would achieve independently;
  
• Diversifying Royal Caribbean's portfolio and increasing its expedition offerings by adding a premiere ultra-luxury brand;
  
• Leveraging the global footprint of the combined companies to generate demand and increase vacation and destination options for the guests of both companies;
  
• Realizing significant synergies related to global market access, supply chain, purchasing power and other economies of scale.
  

Lefebvre said he is confident that the significant investment stake he is retaining will sizably increase its value through the growth this long-term partnership will enable.

Lefebvre and Fain also confirmed that Silversea's CEO Roberto Martinoli will continue in his role, working with the existing Silversea management team.

Silversea, with its intimate, all-suite ships, full spectrum of global cruise offerings sailing to more than 1000 global destinations, and unique luxury expedition vessels, adds a pioneering ultra-luxury brand to RCL's industry-leading brand lineup. RCL's largest brand, Royal Caribbean International, is a contemporary brand focused on adventure-seeking families, Celebrity Cruises is a premium brand providing a modern luxury experience to discerning global travelers, and Azamara Club Cruises is a destination immersive brand offering luxury voyages to unique ports. The company also operates the regional TUI Cruises and Pullmantur brands as part of long-term joint ventures.

The closing is expected to be completed later in the year, subject to customary closing conditions and regulatory approvals.

Regarding 2018, Royal Caribbean reconfirmed its latest adjusted EPS guidance of $8.70 to $8.90 per share. This updated guidance does not include any potential impact from the transaction, although RCL does not expect the transaction to materially impact near-term adjusted earnings per share.

Operationally, the company's forecast for the third and fourth quarters has remained unchanged, but increases in the market price of fuel and the strength of the dollar are expected to cost the company roughly 25 cents per share. Fortunately, strong close-in demand for core products and better than expected performance below the line is expected to drive improved results for the second quarter. These improved results are expected to completely offset the impact of the FX and fuel headwinds in the second half of the year, which allows the company to maintain its guidance for 2018.

Perella Weinberg Partners LP served as financial advisor to RCL and Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel. Barclays PLC served as financial advisor to Manfredi Lefebvre and Morgan, Lewis & Bockius LLP provided legal counsel.

Conference Call

Royal Caribbean will host a conference call today, June 14, 2018 at 8:30 a.m. EDT to discuss the transaction. A link to the live webcast can be found on Royal Caribbean Investor Relations website at www.rclcorporate.com/investors. A replay of the conference call will also be available on the website for 30 days after the call.

About Royal Caribbean Cruises Ltd.

Royal Caribbean Cruises Ltd. (NYSE: RCL) is a global cruise vacation company that owns and operates three global brands: Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. We are a 50 percent joint venture owner of the German brand TUI Cruises, a 49 percent shareholder in the Spanish brand Pullmantur and a 36 percent shareholder in the Chinese brand SkySea Cruises. Together, these brands operate a combined total of 50 ships with an additional 11 on order as of May 31, 2018. They operate diverse itineraries around the world that call on approximately 540 destinations on all seven continents. Additional information can be found on www.rclcorporate.com

About Silversea Cruises

Silversea Cruises, which is chaired by Manfredi Lefebvre d'Ovidio, is recognized as an innovator in the ultra-luxury cruise line industry, offering guests large-ship amenities aboard its intimate, all-suite vessels: Silver Wind, Silver Shadow, Silver Whisper, Silver Spirit and Silver Muse – all designed to offer an atmosphere of conviviality and casual elegance. With the inclusion of the expedition ships Silver Explorer, Silver Galapagos, Silver Discoverer, and with Silver Cloud recently joining the Expedition fleet, Silversea's itineraries encompass all seven continents and feature worldwide luxury cruises to the Mediterranean, Caribbean, both polar regions and hundreds of fascinating destinations in between.

Selected Operational and Financial Metrics

Adjusted Earnings per Share ("Adjusted EPS")

Represents Adjusted Net Income divided by the weighted average or by the diluted weighted average of shares outstanding, as applicable, at the end of the reporting period. We believe this measure is meaningful when assessing our performance on a comparative basis.

For additional information see "Adjusted Measures of Financial Performance" below.

Forward-looking Statements

Interesting news. Kind of all makes sense with RCCLs strategy of having RCI’s continued focus on larger ships.

Very interesting. Thanks for sharing

Now I will be forced to try another line associated with X!

I did always have it in the back of my mind to try SS... :halo:

Maybe go to AZ first...

All in All, good news, I think.

bon voyage

Hopefully we will get captain's club or crown and anchor points on Silversea!

Hopefully we will get captain's club or crown and anchor points on Silversea!

Most likely won't get points (like it is currently) but at least receive recipicol tier level recognition.

I had a hunch that Royal Caribbean would be interested in acquiring luxury assets; however, my guess was NCL which would give them Oceania and Regent. Guess I was wrong on this one, but still feel that NCL would be a good fit.

I had a hunch that Royal Caribbean would be interested in acquiring luxury assets; however, my guess was NCL which would give them Oceania and Regent. Guess I was wrong on this one, but still feel that NCL would be a good fit.

Very interesting thought

We love Silver Seas and hope we can have Elite Plus benefits. Although everything is included.

Very interesting. 67% is a significant stake.

Mike

Very interesting. 67% is a significant stake.

 

Mike

Agreed. 67% is OWNERSHIP!

This is not a merger, this is an acquisition.

Sounds like something I can get excited about too...

Sent from my iPhone using Forums

Oh dear. Another line to be downgraded? Probably. We will see as we have enjoyed Silversea.

Oh dear. Another line to be downgraded? Probably. We will see as we have enjoyed Silversea.

As long as Lisa Lutoff Perlo and her gang keeps their hands off it!

Phil

Oh dear. Another line to be downgraded? Probably. We will see as we have enjoyed Silversea.

But look at the bright side...

A whole new cruise line for you to complain about! :D

Very interesting.

I have a visit on Silver Wind next week, was already looking forward to this, this has just made it even more interesting.

I would suspect that the Silversea CEO's total compensation would be tied to performance as in Celebrity's case. Bet they start using "double double" at Silversea. Of course whatever they do will be for the benefit of the passenger.

As long as Lisa Lutoff Perlo and her gang keeps their hands off it!

 

Phil

Bingo

I had a hunch that Royal Caribbean would be interested in acquiring luxury assets; however, my guess was NCL which would give them Oceania and Regent. Guess I was wrong on this one, but still feel that NCL would be a good fit.

Interesting postings above and by others. Money people and the NY stock market are viewing this move as a "WIN" for Royal Caribbean. In checking the Wall Street Journal a few minutes ago, their stock value is up by a decent margin today. Of course, a win for Wall Street, does not always equal the best news for Silversea customers. Right or wrong??!! We have done five cruises with Silversea, including a link below for our South Africa sailing with them.

We have done two successful cruises with Celebrity, but not yet with RCL. In November, we will be doing Nov. 16-Dec. 5, 2018, our first sailing with Oceania on theirNautica ship from Athens to Dubai. This 20-day cruise will include our first visits to the Holy Lands, Egypt, Middle East, etc. Oceania is part of the mass-market NCL group. Should we worry or avoid them? But Oceania has a decent reputation, especially for its food. NCL also owns and seems to do well with its Regent Seven Seas luxury brand. Being part of a BIG corporate group could be good or bad. How well will it work for the new and larger RCL?? Wall Street has voted thumbs up.

Full stock details at:

https://quotes.wsj.com/RCL

THANKS! Enjoy! Terry in Ohio

AFRICA?!!?: Lots of interesting, dramatic pictures can be seen from this live/blog at:

www.boards.cruisecritic.com/showthread.php?t=2310337

Now at 39,519 views for this visual sharing including Cape Town, along South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta area.

For the past twelve months, here has been the downward slide for RCL, but then the quick upswing today with their stock value due to purchasing Silversea.:

(Open your screen/viewer wider to see these pictures larger/better!)

As long as Lisa Lutoff Perlo and her gang keeps their hands off it!

 

Phil

My thoughts exactly

Sent from my iPhone using Forums

Thinking out loud, both Celebrity and Silversea have expedition ships.

What are the chances of both being comboned or at least have their itineraries coordinated to cover more of the world?

Thinking out loud, both Celebrity and Silversea have expedition ships.

 

 

 

 

 

What are the chances of both being comboned or at least have their itineraries coordinated to cover more of the world?

I was already thinking that.

Sent from my iPhone using Tapatalk

I’ve been planning my 50th birthday cruise for some time and narrowed my cruise line choices down to Silversea earlier this year. Even the cruise is several years away, I’m very much looking forward to this trip, even more now based on this news.

Sent from my iPhone using Tapatalk

Thinking out loud, both Celebrity and Silversea have expedition ships.

 

 

What are the chances of both being comboned or at least have their itineraries coordinated to cover more of the world?

Also, whether they figure on keeping the newest and in their mind best ships, getting rid of the rest.

Also, whether they figure on keeping the newest and in their mind best ships, getting rid of the rest.

So, do they keep more than two out of 9?

Silver Explorer built 1989

Silver Discoverer built 1989

Silver Galapagos built 1990

Silver Cloud built 1994

Silver Wind built 1995

Silver Shadow built 2000

Silver Whisper built 2001

Silver Spirit built 2009

Silver Muse built 2017

Celebrity Millenium - oldest X ship built 2001