Article updated 11:31 a.m. eastern. Updates include: location of four properties for which Hyatt will have management and/or franchise rights; and a comment from LodgeWorks.
CHICAGO—Hyatt Hotels Corporation officially closed on its acquisition of a portfolio of assets from LodgeWorks LP and its private equity partners.
The deal, which originally was set to include the purchase of 24 LodgeWorks properties for US$802 million, last week was pared back to 20 properties.
In a U.S. Securities and Exchange Commission filing Wednesday, Hyatt said it purchased 19 hotels with an additional acquisition to close during the fourth quarter for US$661 million. The properties, which are located throughout the United States, operate under the Hotel Sierra, Avia, Hyatt Place and Hyatt Summerfield Suites brand names.
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As part of the new agreement, Hyatt also will have management and/or franchise rights to the additional four hotels that were part of the original deal. The four hotels are in are in Redmond, Washington; Bellevue, Washington; King of Prussia, Pennsylvania; and Falls Church, Virginia.
Hyatt expects the acquisition to have a positive impact of approximately US$10 million, exclusive of transaction costs, on adjusted earnings before interest, taxes, depreciation and amortization for the remainder of 2011. In 2012, the purchase is expected to generate approximately US$40 million of adjusted EBITDA, according to a Hyatt news release.
"The closing went as smoothly as any we've ever experienced," said John Morse, LodgeWorks' partner and general counsel. "Both LodgeWorks and Hyatt demonstrated their committment to the deal and ongoing partnership by making this a good experience for all. We're pleased and appreciative."
Hyatt declined to comment.