WASHINGTON--March 13, 1998--CapStar Hotel Company (NYSE: CHO), a leading hotel management and investment corporation, today announced that it has signed a contract to purchase Dallas-based Metro Hotels, an independent hotel management company founded in 1971. The contracts being purchased by CapStar comprise 13 hotels with more than 2,400 rooms located throughout the United States. The transaction is expected to close within 30 days, subject to customary documentation and conditions.
"We are very pleased to be adding Metro's management contracts to our
growing portfolio," said Paul W.
Whetsell, CapStar president and CEO. "This acquisition is part of our announced intention to acquire several
small and mid-cap companies in 1998, and Metro's strength as an operating company fits well with CapStar's
long-term growth strategies."
The hotels operate under flags such as Hilton, Radisson, Holiday Inn
and Embassy Suites. The properties are
located in Florida, Colorado, Arizona, Pennsylvania, Illinois, Kansas, New Mexico, Texas, Louisiana and
Walker Harman, Metro's president, commented, "Joining forces with a
high-growth company like CapStar is an
excellent way to continue our 26-year history as an independent hotel operator. Their corporate culture and
operating style are truly a great fit for us."
Metro's Dallas office will combine with CapStar's regional Texas operations.
With Metro's contracts, CapStar will
operate a total of 15 properties in Texas. The company expects to achieve economies of scale by consolidating
accounting and combining operations teams in the Dallas office.
"Metro has an outstanding reputation in the industry, and we are fortunate
to be adding their experience and
knowledge to our operating team," CapStar's chief operating officer David E. McCaslin said. "We will create
focused sales and marketing programs for each of these hotels in order to create optimum value for their owners."
Washington, D.C.-based CapStar Hotel Company owns and manages upscale,
full-service hotels throughout the
U.S. and Canada under such internationally known brands as Hilton, Sheraton, Marriott, Embassy Suites, Westin
and Doubletree. Including three hotels currently under purchase contract and the 13 Metro hotels to be added to
the management portfolio, CapStar's hotel portfolio comprises 56 owned hotels with 14,938 rooms and 84 leased
and/or managed hotels with 13,192 rooms, for a total of 140 properties with 28,130 rooms. The company continues
to actively seek acquisitions and management contracts in major markets and resort locations throughout North