Royal Caribbean sells Azamara brand, fleet

Cruise major Royal Caribbean Group has entered into a definitive agreement to sell its Azamara brand to Sycamore Partners, a New York-based private equity firm.

The cruise brand is being sold in all-cash carve-out transaction for $201 million, subject to certain adjustments and closing conditions.

As informed, Sycamore Partners will acquire the entire Azamara brand, including its three-ship fleet and associated intellectual property. The transaction is subject to customary conditions and is expected to close in the first quarter of 2021.

Royal Caribbean Group explained that the transaction allows it to focus on expanding its Royal Caribbean International, Celebrity Cruises and Silversea brands. In July 2020, Royal Caribbean purchased the remaining shares of Silversea Cruises after acquiring a two-thirds stake in 2018.

“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,” Richard D. Fain, Chairman and Chief Executive Officer of Royal Caribbean Group, commented.

“Even so, Azamara remains a strong brand with its own … potential for growth, and Sycamore’s track record demonstrates that they will be good stewards of what the Azamara team has built over the past 13 years.”

“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, added.

According to the cruise company, Azamara’s value proposition and operations will remain consistent under the new arrangement, and Royal Caribbean Group will work in close collaboration on a transition for Azamara employees, customers and other stakeholders. In conjunction with the transaction, Azamara Chief Operating Officer Carol Cabezas has been appointed President of the brand. 

The transaction will result in a one-time, non-cash impairment charge of approximately $170 million. The sale of Azamara is not expected to have a material impact on Royal Caribbean Group’s future financial results, the cruise major said.

Apart from the abovementioned brands, Royal Caribbean Group is also a 50% owner of a joint venture that operates TUI Cruises and Hapag-Lloyd Cruises. Together, the company’s brands operate 61 ships with an additional 15 on order as of  21 December 2021.