DiamondRock Hospitality Co. (NYSE: DRH
) has agreed to acquire a four-hotel portfolio from affiliates of Blackstone Real Estate Partners VI for $495 million, or approximately $339,000 per key.
The hotels under contract in the off-market deal are the Hilton Boston, the Westin Washington D.C., the Westin San Diego and the Hilton Burlington in Vermont. The price represents an approximately 14.4 times multiple of 2012 forecasted EBITDA, according to DiamondRock.
Mark Brugger, DiamondRock CEO, noted that Blackstone is taking a $75 million ownership stake in DiamondRock as part of the transaction.
"We believe that these four hotels with higher RevPAR and EBITDA margins than those of our existing assets will enhance the overall quality of our portfolio," he said.
Jonathan D. Gray, Global Head of Real Estate at Blackstone, added "we believe in the continued lodging recovery and are excited about receiving an ownership stake in the company."
DiamondRock intends to fund the acquisition with a combination of financing under its senior unsecured credit facility, cash on hand, net proceeds from a public equity offering and the issuance of shares of the company's common stock to Blackstone in a private placement.
The company, which made a $50 million nonrefundable deposit, expects to complete the acquisition this month subject to customary closing conditions and is not subject to a financing or due diligence condition or the receipt of third-party consents.
Goldman, Sachs & Co. acted as financial advisor to the Company in connection with the acquisition.