Choice Hotels to Acquire WoodSpring Suites Brand and Franchise Business for $231 Million
December 18, 2017 1:42pm
ROCKVILLE, Md., Dec. 18, 2017 -- Choice Hotels International (NYSE: CHH), one of the world's largest hotel companies, today announced that it has reached a definitive agreement to acquire the brand and franchise business of WoodSpring SuitesSM from WoodSpring Hotels Holdings LLC, a portfolio company of Lindsay Goldberg, for approximately $231 million, subject to customary adjustments. The acquisition will add nearly 240 extended-stay hotels in 35 states to the Choice Hotels portfolio, creating an extended-stay portfolio of more than 350 properties with existing brands, MainStay Suites® and Suburban Extended Stay®.
"We are pleased to announce our plans to welcome WoodSpring Suites to our portfolio of brands. Like Choice Hotels, WoodSpring Suites has demonstrated exceptional customer service, attractive franchisee return on investment, and tremendous growth," said Patrick Pacious, president and CEO of Choice Hotels. "Extended stay is a fast-growing segment, reporting some of the strongest gains in demand and has led the hospitality industry in annual RevPAR growth. The addition of the WoodSpring Suites brand will allow us to strengthen our scale within the attractive extended-stay segment, expand our runway for growth, and continue to create value for our customers, franchisees and shareholders."
WoodSpring Hotels is the nation's fastest growing value extended-stay hotel company, with nearly 240 properties in 35 states nationwide. Over the past few years, the company has successfully executed a brand relaunch and repositioning, resulting in WoodSpring Suites unit growth of more than 25 percent and franchise fee revenue growth of 45 percent in the last three years. More than 25 hotels are expected to open in 2018.
"Choice Hotels and WoodSpring Suites share the same values and dedication to customer service and franchisees," said Gary A. DeLapp, WoodSpring president and CEO. "We are thrilled that our brand will join the powerful value proposition that Choice Hotels offers and know our commitment to providing the best guest experience will remain a priority."
Choice Hotels plans to acquire the WoodSpring hotel brands, including franchise operations, marketing and development, for approximately $231 million. The acquisition will be funded by cash and is expected to be accretive to financial performance in 2018, excluding one-time transaction and integration costs. For U.S. tax purposes, the transaction constitutes an asset sale, and Choice expects to amortize the acquired assets. WoodSpring Hotels Holdings LLC will be renamed and retain its hotel management operations. The transaction is expected to close in the first quarter of 2018, subject to regulatory approval, the concurrent closing of the sale of WoodSpring's owned hotels to a third party, and satisfaction of customary closing conditions.
Moelis & Company LLC is serving as financial advisor to Choice Hotels on the transaction, and Willkie Farr & Gallagher is serving as legal advisor. Morgan Stanley and Co. LLC is serving as financial advisor to WoodSpring, and Weil, Gotshal & Manges LLP is serving as legal advisor.
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woodspring hotels holdings llc,
Choice Hotels International, Inc. (NYSE: CHH) is one of the world's largest hotel companies. With over 6,500 hotels franchised in more than 40 countries and territories, Choice Hotels International represents more than 500,000 rooms around the globe. As of September 30, 2017, over 800 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® Hotels, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge®, Rodeway Inn®, and Vacation Rentals by Choice Hotels™ brands provide a spectrum of lodging choices to meet guests' needs. With more than 33 million members, our Choice Privileges® rewards program enhances every trip a guest takes, with benefits ranging from instant, every day rewards to exceptional experiences, starting right when they join. All hotels and vacation rentals are independently owned and operated. Visit us at www.choicehotels.com for more information.
Contact: Sarah Lee
WoodSpring Hotels Holdings LLC, the economy extended-stay lodging company behind the nation's fastest growing value extended-stay hotel brand operating under the WoodSpring Suites and Value Place brands, provides management and accounting services for hotels and includes business units for development, construction and operation of company-owned hotels. The WoodSpring brand, with nearly 240 hotels and approximately 28,500 rooms in 35 states nationwide, provides ownership groups with an easy-to-operate model with low overhead and higher return on investment, and its recent brand relaunch has refreshed virtually all aspects of the hotel experience, including free wireless internet access and new interior and exterior signage to appeal to the budget-minded, long-term guest. For information, visit www.woodspringfranchise.com.
Lindsay Goldberg is a private investment firm that focuses on partnering with families, founders and long-term oriented management teams seeking to actively build their businesses. For more information about Lindsay Goldberg, please visit www.lindsaygoldbergllc.com.
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