ROCKVILLE, MD—Choice Hotels International has reached a definitive agreement to acquire the brand and franchise business of WoodSpring Suites 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 Pat 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.”
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.
Tags:Choice Hotels Choice Hotels International Gary A. DeLapp Pat Pacious WoodSpring WoodSpring Suites
