Sunterra Acquires Beach Group LLC

15-May-2006

Sunterra Corporation (Nasdaq: SNRR) one of the world's largest vacation ownership companies, has acquired leading specialized online rental company Beach Group LLC for approximately $4 million in cash and future consideration. The acquisition is an integral part of Sunterra's strategy to identify and maximize new marketing channels that provide efficient access to the company's targeted customer. Beach Group's rental clientele fits the demographic profile of target customers for Sunterra's premium properties and Sunterra expects that this acquisition will provide the Company with a new channel for rental opportunities and vacation ownership sales. Beach Group will be integrated into Sunterra as a profitable enterprise before realizing any benefits from synergies. Sunterra's president and chief executive officer, Nick Benson, commented, "I am excited about the acquisition of Beach Group as it provides the Company with an immediate fit with our recently announced strategic direction for our North American business. In addition, it is also an example of our focus on developing cost-efficient methods for generating quality leads which, we expect, will in turn improve sales volume per guest and reduce average sales and marketing costs." Beach Group principal John Gilliam will become president of the newly formed Sunterra Beach Group LLC. Beach Group generated $15.4 million in gross rental activity in calendar 2005, with $1.7 million in net rental commissions being retained by Beach Group. Further details about the transaction were not disclosed.