|
|
.
Approximately CDN $10.2 million; Includes Twenty-two Management Contracts |
Toronto, Ontario (CANADA) � September 5, 2002
� AFM Hospitality Corporation (TSX:AFM) today announced that it has entered
into a non-binding letter of intent to acquire all the issued and outstanding
shares of Marshall Management, Inc. from Charles Marshall and various other
members of the Marshall family of Salisbury, Maryland, U.S.A. AFM will
complete the transaction through a new U.S. subsidiary to be incorporated.
The deal includes the management agreements of twenty-two hotels with more than three thousand rooms. The hotels are located in Pennsylvania, New Jersey, Delaware, Maryland, Virginia, North Carolina, Florida, Kentucky and Louisiana operating under the Holiday Inn, Ramada, Hampton, Quality, Comfort, Sleep and Days Inn brands, plus numerous independent hotels. After the completion of this acquisition, AFM through its subsidiaries
Northwest Lodging International (USA) Inc., Northwest Lodging International
(Canada) Inc. and Marshall Management, Inc., will have seventy-one hotels
under management contract representing more than seven thousand rooms.
This agreement is tentatively scheduled to take effect October 31, 2002. Final terms and conditions are yet to be settled and the resulting deal will be subject to approval by AFM�s Audit Committee and Board of Directors, as well as the Toronto Stock Exchange. Under the present terms, in exchange for all the issued and outstanding shares of Marshall Management, Inc., members of the Marshall family will collectively receive approximately CDN $10,230,000 depending upon the currency exchange rate on the day of closing. AFM will deliver payment in the form of a 5-year promissory note for 1/3 of the purchase price bearing interest at prime plus 1%, with AFM common stock at the market price on the day of closing for the balance of the purchase price, together with an equivalent number of warrants. For example, based on a CDN $5.00 per share market price and a $1.55 CDN/USD exchange rate prevailing on the closing date, this would result in a 5-year promissory note of USD $2,200,000 at prime plus 1% with up to 1,364,000 common shares being issued together with up to 1,364,000 warrants exercisable within five years on a 1-for-1 basis for common shares of AFM at CDN $5.00 per share. All such securities will be held in escrow and released per a performance formula over three years. �Our transaction with AFM will build on the synergies between both companies,� said Charles Marshall, Chairman and CEO of Marshall Management, Inc. �I am confident that the integration of our two companies will provide our guests with some of the best lodging experiences in the eastern United States. We look forward to our management team continuing as the newest regional center for AFM�s hotel management division. I am pleased that all Marshall Management employees will continue to provide their services under the new management.� �AFM continues to demonstrate its ability to partner with property owners to deliver superior hotel management services,� stated Lawrence P. Horwitz, Chairman of AFM Hospitality Corporation, �Our mission is to make our hotel owners more competitive, to help them build market share, and also to enable them to attract and recruit the best available people. We look forward to expanding our management services throughout the United States. This acquisition provides us with an excellent base of operations to assist our growth in the eastern U.S.� About AFM Hospitality Corporation
This Press Release contains certain forward-looking statements and information
from AFM Hospitality Corporation relating, but not limited, to the
|
Contact:
AFM Hospitality Corporation
www.afmcorp.com |