US: Choice Hotels International has reached an agreement to acquire the brand and franchise business of WoodSpring Suites, from WoodSpring Hotels Holdings LLC.
The acquisition will add nearly 240 extended-stay hotels in 35 states to the Choice Hotels portfolio, creating an extended-stay portfolio of more than 350 properties with existing brands, MainStay Suites and Suburban Extended Stay.
The deal adds an asset light franchise business that complements Choice’s existing extended-stay business with WoodSpring Suites’ market leading capabilities. Choice plans to hire the WoodSpring Suites franchise business employees and strengthen the existing multi-unit developer and franchisee relationships that have contributed to the success of the brand.
“We are pleased to announce our plans to welcome WoodSpring Suites to our portfolio of brands. Like Choice Hotels, WoodSpring Suites has demonstrated exceptional customer service, attractive franchisee return on investment, and tremendous growth,” said Patrick Pacious, president and CEO of Choice Hotels. “Extended stay is a fast-growing segment, reporting some of the strongest gains in demand and has led the hospitality industry in annual RevPAR growth. The addition of the WoodSpring Suites brand will allow us to strengthen our scale within the attractive extended-stay segment, expand our runway for growth, and continue to create value for our customers, franchisees and shareholders.”
Gary DeLapp, WoodSpring president and CEO, said: “Choice Hotels and WoodSpring Suites share the same values and dedication to customer service and franchisees. We are thrilled that our brand will join the powerful value proposition that Choice Hotels offers and know our commitment to providing the best guest experience will remain a priority.”
The acquisition will be funded by cash and is expected to be accretive to financial performance in 2018, excluding one-time transaction and integration costs.
WoodSpring Hotels Holdings LLC will be renamed and retain its hotel management operations. The transaction is expected to close in the first quarter of 2018, subject to regulatory approval, the concurrent closing of the sale of WoodSpring’s owned hotels to a third party, and satisfaction of customary closing conditions.
Moelis & Company LLC is serving as financial advisor to Choice Hotels on the transaction, and Willkie Farr & Gallagher is serving as legal advisor. Morgan Stanley and Co. LLC is serving as financial advisor to WoodSpring, and Weil, Gotshal & Manges LLP is serving as legal advisor.
Only last week, Serviced Apartment News named Gary DeLapp as one of the 10 industry figures to watch in 2018 – even we were surprised he made the headlines so soon!</p
