|ATLANTA - April 27, 1999--Suburban Lodges of America, Inc.
(Nasdaq:SLAM) announced today that it has executed a definitive agreement
to purchase the assets of Little Rock-based GuestHouse International LLC,
a franchisor of lodging facilities under the names of GuestHouse Inns,
Hotels and Suites.
Under the agreement, Suburban Lodges would pay $1.25 million in cash and issue 300,000 shares of Suburban common stock at closing. Additional consideration would be payable over time subject to achievement of certain financial performance and new facility goals. The transaction is subject to satisfactory completion of due diligence review and other closing conditions. There can be no assurance that the transaction will be completed.
GuestHouse International currently has 41 independently owned and operated franchise hotels in 17 states with additional hotel locations under development. The properties represent a diverse group of well maintained, newly constructed, or recently renovated hotels and inns. GuestHouse properties adhere to high quality standards for cleanliness, safety and service, and include many two and three diamond AAA rated hotels.
David E. Krischer, Suburban Lodges' Chairman and CEO, said: "We are very pleased to announce this strategic acquisition. Suburban Lodges is an experienced franchise company and the addition of this traditional nightly hotel brand will complement our existing lodging brand of Suburban Lodge extended stay hotels. Our success and experience in franchising will enable us to offer an entire new line of product with minimal addition of corporate overhead and provide another revenue source for the company."
James H. Keet, CEO of GuestHouse, added, "I am looking forward to being part of the Suburban Lodge family. The extraordinary success they have had developing, operating and franchising the Suburban Lodge product bodes well for the future expansion of the GuestHouse chain. It is a natural fit." Mr. Keet will continue with Suburban Lodges as the GuestHouse brand president.
Suburban Lodges of America, Inc. develops and franchises Suburban Lodge Hotels, the largest economy extended stay hotel brand in the nation. Suburban Lodge hotels are perfect for value conscious extended stay guests seeking quality accommodations. Each guest room includes a fully equipped kitchen and all the amenities necessary for a comfortable stay. Rates generally range from $159 to $279 weekly for standard guest rooms.
Suburban Lodges currently has 98 operating hotels (58 company -owned, 40 franchised) 12 under construction (4 company-owned and 8 franchised) and 20 franchise hotels in development. Further information on Suburban Lodges can be found at www.suburbanlodge.com.
The statements in this release that relate to future plans, expectations,
events performance and the like are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and the
Securities Exchange Act of 1934. Actual results or events could differ
materially from those described in the forward-looking statements due to
a variety of factors, including economic conditions, development efficiencies,
zoning delays, adverse weather conditions, occupancy and performance, and
other risks described in the
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