in Baton Rouge, La. for $14.4 million, $110,000 per key
ARLINGTON, Va., June 27, 2006—Interstate Hotels & Resorts (NYSE: IHR), the nation’s largest independent hotel management company, today announced that it has acquired the 131-room Hilton Garden Inn in Baton Rouge, La. for $14.4 million, or $110,000 per key. The purchase price is approximately 9.0x projected 2006 EBITDA of $1.6 million (operating income of $1.1 million plus $0.5 million of depreciation expense). The acquisition was funded with a combination of cash on hand and cash available on the company’s senior credit facility. This acquisition was included in the company’s previously issued earnings guidance on May 3, 2006. It is the third wholly owned and first select-service property the company has acquired since February 2005, as part of its announced strategy to diversify its earnings base. Interstate also will manage the hotel.
“This is a newly constructed hotel—less than two years old—in excellent physical condition and the only select-service hotel in the Baton Rouge Airport market,” said Thomas F. Hewitt, chief executive officer. “The Baton Rouge market and this hotel benefited significantly from the huge influx of residents, businesses and government agencies that relocated there, many permanently, due to the effects of hurricane Katrina. We are very optimistic about the hotel’s long-term growth potential.”
“The hotel is well located, convenient to the airport, downtown Baton
Rouge, two universities, several large oil and natural gas company installations,
and other demand generators,” said Leslie Ng, chief investment officer.
“And as the only Hilton Garden Inn in Baton Rouge and with other Hilton
branded hotels a good distance away, this property enjoys a commanding
position in the Hilton reservation system.”
As of May 31, Interstate Hotels & Resorts operated 264 hospitality properties with nearly 60,000 rooms in 41 states, the District of Columbia, Canada, and Russia. BridgeStreet Worldwide, an Interstate Hotels & Resorts’ subsidiary, is one of the world’s largest corporate housing providers. BridgeStreet and its network of Global Partners offer more than 9,800 corporate apartments located in more than 95 MSAs throughout the United States and internationally. For more information about Interstate Hotels & Resorts, visit the company’s Web site: www.ihrco.com.
This press release contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will,” which indicate that those statements are forward-looking, although not all forward-looking statements will contain such words.
|Also See:||Argosy Gaming Company Appoints Starwood to Manage New $20 million 300-room Sheraton Baton Rouge Convention Center Hotel in Baton Rouge / Sept 2000|
|Leslie Ng to Join Interstate Hotels & Resorts as Chief Investment Officer / September 2005|