Hotel Online Special Report Lodgian Acquires 100% Ownership In Six Full-Service Hotels ATLANTA, Sept. 2, 1999 – Lodgian, Inc. (NYSE: LOD), one of the nation’s largest owners and operators of hotels, today announced the acquisition of the remaining 49 percent partnership interest in six full-service hotels with a total of 1,277 rooms from its limited partner for approximately $10.2 million. Funds for the acquisition came from Lodgian’s existing cash reserves.
Prior to the acquisition, Lodgian owned 51 percent of the partnerships that owned the following hotels:
- Crowne Plaza-Worcester, MA 243 Rooms
- Crowne Plaza-Saginaw, MI 177 Rooms
- Hilton-Sioux City, IA 193 Rooms
- Holiday Inn-Ft. Wayne, IN 208 Rooms
- Holiday Inn-Cleveland/Richfield, OH 217 Rooms
- Holiday Inn-Augusta, GA 239 Rooms
Total: 1,277 Rooms
The total value, based on the terms of this transaction, equates to approximately $35,000 per room. On the basis of full-year 1999 earnings before depreciation, taxes and amortization (EBITDA) projections, Lodgian estimates that it is paying slightly over six times EBITDA for these partnership interests. Robert S. Cole, Lodgian’s President and CEO, noted, “At a little over six times 1999 EBITDA and with no adverse impact on our existing debt level, we believe this transaction represents a favorable return on investment and an appropriate use of a small portion of the Company’s cash reserves.”
About Lodgian
Lodgian, Inc. owns or manages a portfolio of 134 hotels with more than 25,000 rooms in 35 states and Canada. The hotels are primarily full service, providing food and beverage service, as well as meeting facilities.
Substantially all of Lodgian’s hotels are affiliated with nationally recognized hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton, Hilton, Doubletree and Westin. Lodgian’s common shares are listed on the New York Stock Exchange under the symbol “LOD.” Lodgian is a component of both the Russell 2000® Index, representing small cap stocks, and the Russell 3000® Index, representing the broader market.
Forward-Looking Statements Note: Statements in this press release which are not strictly historical are “forward-looking” statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the company’s actual results in the future to differ materially from expected results. These risks include, among others, competition within the lodging and contract service industries; the relationship between supply and demand for hotel rooms; the effects of economic conditions; issues associated with the ongoing integration of the former Servico, Inc. and Impac Hotel Group, LLC; the acquisition and renovation of existing hotels and the development of new hotels; operating risks; the cyclical nature of the lodging industry; risks associated with the dependence on franchisers of the company’s lodging properties; and the availability of capital to finance planned growth, as described in the company’s filings with the Securities and Exchange Commission.
Contact: Ken Posner, Chief Financial Officer, 404-365-4469, or [email protected], or Ginny Gaines, Director of Corp. Comm., 404-365-3805, or [email protected], both of Lodgian, Inc.; http://www.lodgian.com Also see Lodgian Completes $565 Million Recapitalization in Current Tight Market for Capital / July 1999 Lodgian’s Improved Operating Performance Driven by Successful Hotel Renovations and Upscale Brand Repositionings / Sept 1999