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Approximately $10.5 million; Suburban Extended Stay Hotels Becomes the Tenth Brand in the Choice Hotels System |
SILVER SPRING, Md. (September 28, 2005) � Choice Hotels International,
Inc. (NYSE:CHH) today announced it has acquired Suburban Franchise Holding
Company, Inc., and its subsidiary, Suburban Franchise Systems, Inc.
With the addition of the 67-property Suburban Extended Stay Hotels chain
to the Choice system, Choice enters the economy extended-stay lodging segment
and immediately becomes its largest franchisor with nearly 9,000 rooms
online.
�This acquisition allows Choice to enter a new segment, building on the excellent reputation and performance of the Suburban brand and the expertise we have gained through our mid-scale extended stay MainStay Suites brand,� said Charles A. Ledsinger, Jr., president and chief executive officer of Choice Hotels. �The economy extended-stay segment has strong supply-side potential and a solid track record for providing above-average returns for hoteliers. Last year the segment achieved an average occupancy percentage in the mid 70s compared to 61% for the overall US hotel average.� He added, �As we combine Suburban�s strong product and brand name with our highly effective global marketing and reservations system, as well as our focused extended stay services and technology infrastructure, we provide both existing Suburban owners and new developers an opportunity for a very compelling return on investment.� The purchase price was approximately $10.5 million (consisting of $8.0
million in cash and approximately $2.5 million of liabilities) with up
to an additional $5.0 million payable over the next three years, contingent
upon meeting certain development targets. The company said that the
transaction is expected to add up to 2 cents to diluted earnings per share
in 2006.
About Choice Hotels International
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law. Such statements are based on management�s beliefs, assumptions and expectations, which in turn are based on information currently available to management. |
Contact:
Choice Hotels International
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