Sonder Holdings Inc. (NASDAQ: SOND or “Sonder”), a leading global
brand of premium, design-forward apartment-style accommodations
serving the modern traveler, today announced that it has entered
into a long-term strategic licensing agreement with Marriott
International, Inc. (NASDAQ: MAR or “Marriott”). Through this
strategic agreement, over 9,000 live Sonder units are expected to
join the Marriott portfolio by the end of 2024, with approximately
1,500 additional contracted units anticipated to join the Marriott
system at later dates. Sonder’s properties, which consist of
apartment-style accommodations and intimate boutique hotels, are
expected to be fully integrated with Marriott’s extensive
distribution channels, and be available for booking on Marriott.com
and the Marriott Bonvoy mobile app as a new collection called
Sonder by Marriott Bonvoy. Sonder’s properties are also expected to
participate in the highly regarded Marriott Bonvoy travel program
with over 210 million members, and gain access to Marriott’s global
sales organization. Sonder anticipates that full integration with
Marriott's digital channels and platform will occur in 2025;
however, Sonder expects that Marriott.com will include link-offs to
Sonder's digital platforms to support shop, book, earn and redeem
by Marriott Bonvoy members and customers before the end of 2024.
Sonder expects the strategic agreement to deliver significant
revenue opportunities and operating efficiencies for Sonder.
“We're delighted about our strategic agreement with Marriott.
Benefitting from the extensive distribution, loyalty program and
sales capabilities of a global hospitality leader will help us to
prioritize our core value drivers, including our unique guest
experience, while unlocking significant opportunities for increased
revenue and cost efficiency,” said Francis Davidson,
Co-Founder and CEO of Sonder. “We look forward to
welcoming Marriott Bonvoy members to our approximately 200
properties worldwide, creating new opportunities for guests to
enjoy Marriott’s award-winning loyalty program. Thank you to all
our employees, guests, partners and stakeholders as we launch this
exciting new chapter.”
“We are excited about this new agreement, which is set to expand
our portfolio of longer-stay accommodations in key markets around
the world,” said Tim Grisius, Global Officer, M&A,
Business Development and Real Estate, Marriott
International. “Marriott has long believed in providing
the right product at the right price point for all trip purposes
and generations of travelers. With the planned addition of Sonder
by Marriott Bonvoy, we will be able to provide guests seeking
apartment-style urban accommodations with even more options in the
Marriott Bonvoy portfolio.”
Compelling Benefits of Marriott Strategic Licensing
Agreement
- Increasing revenue by integrating with Marriott’s
commercial engine: Following full integration with
Marriott’s extensive global sales and marketing capabilities, as
well as with Marriott’s loyalty platform and distribution and
booking channels, Sonder expects these sources of new and improved
demand to drive substantial uplift in revenue per available room
(“RevPAR”) over time.
- Delivering cost savings through synergies and
scale: The full integration is expected to complement
Sonder’s existing technology which powers end-to-end digital guest
journeys and operating efficiencies. Sonder expects to realize
substantial customer acquisition cost savings through improved
distribution channel mix and preferred distribution channel
rates.
- Powering future growth: Sonder believes that
the strategic agreement with Marriott will enhance Sonder’s value
proposition to real estate owners who can expect to realize the
unique combination of Sonder’s product and Marriott’s
distribution.
Strengthened Balance Sheet
Sonder also announced that it has enhanced its liquidity profile
by approximately $146 million to support its long-term profitable
growth and the integration efforts under the strategic agreement
with Marriott. Sonder is expected to have access to these
additional funds over the coming months:
- A consortium of investors (the “Investor Consortium”) has
committed to purchase approximately $43 million of a newly
designated series of convertible preferred equity (the “Preferred
Equity”) of Sonder.
- Sonder’s existing noteholders have provided a total of
approximately $83 million in additional liquidity, including $4
million in financing funded on August 13, 2024, and approximately
$79 million in the form of a 30-month extension (through the end of
2026) of the paid-in-kind feature of the Note Purchase Agreement
(21 months of which is at Sonder’s option).
- Other sources of liquidity totaling $20 million.
The above is in addition to the previously announced $16 million
in financing from Sonder’s existing noteholders.
Janice Sears, Lead Independent Director of the Sonder
Board of Directors, said, “Today’s announcement is the
result of deliberate and thoughtful planning by the Board and the
management team to best position Sonder to deliver value for all
stakeholders. Sonder has been relentlessly focused on operational
efficiency to deliver long-term profitability and these actions are
the next step in achieving that goal. With significantly improved
financial flexibility from the support of our lenders and
investors, Sonder now has a stronger balance sheet to fuel its
value creation strategy as it embarks on its next chapter,
including the strategic licensing agreement with Marriott.”
Terms of the Convertible Preferred Equity
Transaction
Under the terms of the agreements with the Investor Consortium
and Sonder’s existing noteholders, the Investor Consortium and
Sonder’s existing noteholders purchased an aggregate of
approximately $14.7 million of Preferred Equity on or about August
13, 2024, and have committed to purchase an additional
approximately $28.6 million of Preferred Equity, subject to Sonder
becoming current on its overdue U.S. Securities and Exchange
Commission (“SEC”) reports and satisfaction of customary closing
conditions, which is expected to occur in the fourth quarter of
2024.
Holders of over 50% of Sonder’s outstanding shares of common
stock have agreed to vote their shares in favor of certain
proposals related to this transaction at a meeting of Sonder’s
shareholders, which is expected to be scheduled later this
year.
Additional information regarding the terms of the Preferred
Equity will be provided in a Current Report on Form 8-K to be filed
with the SEC.
Amendments to Note Purchase Agreement with Sonder’s
Existing Noteholders
Sonder has entered into further amendments of its existing Note
Purchase Agreement with a syndicate of Sonder’s existing
noteholders, providing for (i) a one year maturity extension to
December 2027, (ii) a 30-month extension of the paid-in-kind
feature of the Note Purchase Agreement through the end of 2026 (21
months of which is at Sonder’s option), and (iii) a covenant
holiday related to Liquidity and Free Cash Flow through the third
quarter of 2025.
Additional information regarding these amendments will be
provided in a Form 8-K to be filed with the SEC.
Advisors
Moelis & Company LLC is serving as financial advisor to
Sonder and Kirkland & Ellis LLP is serving as legal
counsel.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based upon current expectations or beliefs, as well as
assumptions about future events. Forward-looking statements include
all statements that are not historical facts and can generally be
identified by terms such as “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “potentially,” or “will” or similar
expressions and the negatives of those terms. These statements
include, but are not limited to, statements regarding improvements
in liquidity and profitability; the anticipated benefits and
synergies from the strategic licensing agreement with Marriott,
including, but not limited to, the timing, scope and impact of
Sonder’s participation in the Marriott Bonvoy loyalty program and
Marriott’s distribution and booking channels and systems, including
the anticipated integration period, initial link-off to Sonder’s
digital platforms, and number of properties; statements about
potential revenue opportunities, improved demand and RevPAR,
operating efficiencies and cost savings, synergies and scale from
the strategic licensing agreement with Marriott; anticipated
enhancement of Sonder’s value proposition to real estate owners and
potential growth; statements about the timing and amount of
anticipated preferred equity funding and other sources of
liquidity; statements about improving Sonder’s balance sheet and
long-term profitable growth; and other information concerning
Sonder’s financial and operating goals and estimated, possible or
assumed future financial or operating results and measures, cash
flow, or liquidity.
These forward-looking statements are based on management’s
current expectations, estimates, and beliefs, as well as a number
of assumptions concerning future events. Actual results could
differ materially from those expressed in or implied by the
forward-looking statements due to a number of risks and
uncertainties, including but not limited to: the risk that the
strategic licensing agreement with Marriott will not provide the
anticipated benefits, including operating efficiencies and higher
RevPAR over time; risks and uncertainties associated with the
strategic licensing agreement with Marriott, including
uncertainties related to the timing and extent of benefits,
synergies, cost savings, and future revenue opportunities;
uncertainties associated with the integration of Sonder’s portfolio
with Marriott’s platforms, distribution channels, sales
capabilities, and systems, including the risk of delays or
unanticipated disruptions or complications; uncertainties
concerning Sonder’s previously announced financial restatement
process, including the possibility that additional accounting
errors or corrections will be identified and the possibility of
additional delays in Sonder’s SEC filings; uncertainties associated
with Sonder’s liquidity, debt, and capital resources, including
uncertainties associated with the satisfaction of conditions for
and timing of the preferred equity financing and other sources of
liquidity, and the risk that Sonder’s efforts to conserve cash will
be unsuccessful and that additional funding or other sources of
liquidity will not be available on acceptable terms or at all; the
risk that Sonder will be unsuccessful in achieving positive free
cash flow; and the other risks and uncertainties described in
Sonder’s SEC reports, including its Current Report on Form 8-K
dated as of the date hereof, and under the heading “Risk Factors”
in its most recent annual report on Form 10-K and quarterly reports
on Form 10-Q. The forward-looking statements contained herein speak
only as of the date of this press release. Except as required by
law, Sonder does not undertake any obligation to update or revise
its forward-looking statements to reflect events or circumstances
after the date of this press release.
About Sonder
Sonder (NASDAQ: SOND) is a leading global brand of premium,
design-forward apartments and intimate boutique hotels serving the
modern traveler. Launched in 2014, Sonder offers inspiring,
thoughtfully designed accommodations and innovative, tech-enabled
service combined into one seamless experience. Sonder properties
are found in prime locations in over 40 markets, spanning ten
countries and three continents. The Sonder app gives
guests full control over their stay. Complete with self-service
features, simple check-in and 24/7 on-the-ground support, amenities
and services at Sonder are just a tap away, making a
world of better stays open to all.
To learn more, visit www.sonder.com or follow Sonder on
Instagram, LinkedIn or X.
Download the Sonder app on Apple or Google Play.
Investor Relations:
ir@sonder.com
Media:
press@sonder.com
Dan Moore / Tali EpsteinCollected
StrategiesSonder-CS@collectedstrategies.com
Marriott (NASDAQ:MAR)
Historical Stock Chart
From Jul 2024 to Aug 2024
Marriott (NASDAQ:MAR)
Historical Stock Chart
From Aug 2023 to Aug 2024