Hornblower announced last week that it has entered into an agreement with its investors that will strengthen the company's financial foundation and position Hornblower for a successful future.
Under the terms of the agreement, funds managed by Strategic Value Partners LLC (SVP) and its affiliates, a global alternative investment firm, will acquire majority ownership of Hornblower and provide a significant equity investment in the business. Hornblower officials said in a prepared statement.
SVP is a global alternative investment firm that focuses on special situations, private equity, opportunistic credit, and financing opportunities. The firm uses a combination of sourcing, financial and operational expertise to help its portfolio companies unlock value and accelerate their businesses. SVP has significant influence or control with respect to more than 15 businesses around the world, which have approximately 100,000 employees and over $12 billion in revenues.
Crestview Partners will retain a significant minority position in Hornblower and become the sole owner of Journey Beyond, a stand-alone operating unit of Hornblower and the leading experiential travel provider in Australia. The agreement also provides for Hornblower to receive $121 million in new-money financing from SVP-managed funds and Crestview, and the company's total debt will be reduced by approximately $720 million.
In connection with the agreement, Hornblower's overnight cruising business, American Queen Voyages (AQV), will be sold, or if a sale cannot be achieved, its operations will be wound down. Hornblower is taking this action because of the underperformance of AQV, which has not rebounded from the pandemic.
These collective actions will enable Hornblower to move ahead with a more focused portfolio, stronger balance sheet and additional financial flexibility, well-positioned to continue driving growth in its core land- and water-based experiences businesses. These core businesses are delivering excellent results and serving thousands of guests every day.
"Building on our commitment to deliver amazing experiences for our guests, Hornblower has grown to become a global leader in world-class experiences and transportation," Kevin Rabbitt, The Hornblower Group’s chief executive officer, said in the statement. "We have strong relationships with our government agency and business partners, and our core businesses are performing well with robust and growing demand."
"Hornblower is an outstanding company and a market leader in water-based transportation, tours and experiences, with complementary businesses and long-term contracts in attractive markets,” David Geenberg, co-head of the North American Investment Team at SVP, said. “With substantial growth potential in travel and tourism, we see significant opportunities ahead for Hornblower to further expand its leadership position. We look forward to working closely with the leadership team to help support the Company's strong operating staff, excellent service and exceptional guest experiences as we usher in Hornblower's next era of success."
