Royal Caribbean Group will sell its three-ship Azamara brand to a private equity firm for $201m.
New York-based Sycamore Partners plans to acquire Azamara in the first quarter of this year, Richard Fain-led Royal Caribbean said on Tuesday.
“Our strategy has evolved into placing more of our resources behind three global brands, Royal Caribbean International, Celebrity Cruises and Silversea, and working to grow them as we emerge from this unprecedented period,” chairman and chief executive Fain said in a statement.
The cash transaction will result in a non-cash impairment charge of about $170m but is not expected to have a material impact on Royal Caribbean's bottom line, the cruise major said.
“We are pleased that Royal Caribbean Group has entrusted Sycamore to support Azamara in its next phase of growth,” Stefan Kaluzny, managing director of Sycamore Partners, said in a statement.
“We believe Azamara will remain a top choice for discerning travellers as the cruising industry recovers over time.”
Sycamore Partners said Azamara's "value proposition" will remain the same as part of a "seamless transition" for its employees, customers and other stakeholders.
Azamara chief operating officer Carol Cabezas has been appointed the brand's president.
Royal Caribbean currently owns 61 ships under brands Azamara, Royal Caribbean International, Celebrity Cruises and Silversea. It has 15 vessels on order through 2021.
The company, which is making the move after suffering billions of dollars in Covid-19-related losses, is also a 50% owner of a joint venture that operates TUI Cruises and Hapag-Lloyd Cruises.
The entire cruise industry has faced unprecedented financial hardship as a result of the pandemic, which has stopped the multibillion-dollar sector in its tracks since March.
Sycamore Partners, which focuses on consumer, distribution and retail-related investments, has raised about $10bn in capital since its founding in 2011.
Miami-based Royal Caribbean's shares, which trade on the New York Stock Exchange under the ticker symbol RCL, gained 1.1% to reach $73.70 by late morning on Tuesday.
