Hyatt Completes Acquisition of LodgeWorks’ Portfolio
Hyatt Hotels Corporation (NYSE: H) announced that its wholly owned subsidiaries acquired a portfolio of assets from LodgeWorks, L.P. and its private equity partners, finalizing a previously announced transaction to purchase twenty hotels for approximately $660 million in cash, with one hotel acquisition to close during the fourth quarter of 2011. The acquisition also includes the management or franchise rights to an additional four hotels.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations”
The hotels involved in the transaction are in strategic, high barrier to entry markets and are currently branded under the Hotel Sierra® (17), Hotels (4), Hyatt Place®(1) and Hyatt Summerfield Suites®(2) brands. The acquisition will enable the company to introduce Hyatt-branded hotels in several markets where it currently is not represented at all and to expand its extended stay representation significantly.
The expansion of the company’s extended stay presence that Hyatt achieves through this transaction is a critical milestone in its drive to develop the preferred brand in the extended stay segment.
Hyatt expects the acquisition to have a positive impact of approximately $10 million, exclusive of transaction costs, on Adjusted EBITDA for the remainder of 2011. In 2012, the purchase is expected to generate approximately $40 million of Adjusted EBITDA. For our definition of Adjusted EBITDA and a reconciliation of consolidated Adjusted EBITDA to EBITDA and a reconciliation of EBITDA to its most directly comparable GAAP measure, net income attributable to Hyatt Hotels Corporation, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations” of our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011.
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