DiamondRock Announces Agreement To Acquire Four Hotels From Blackstone
DiamondRock Hospitality Company today announced that it has entered into a purchase and sale agreement to acquire a portfolio of four hotels from affiliates of Blackstone Real Estate Partners VI ("Blackstone") for a contractual purchase price of approximately $495 million. The hotels under contract to be acquired are the Hilton Boston, the Westin Washington D.C., the Westin San Diego, and the Hilton Burlington. The contractual purchase price represents an approximately 14.4 times multiple of 2012 forecasted EBITDA and approximately $339,000 per key. READER COMMENTS
In an announcement, Mark Brugger, chief executive officer of DiamondRock, said, "We are excited to acquire these four high quality hotels from affiliates of Blackstone in an off-market deal and equally pleased that Blackstone is taking a $75 million ownership stake in DiamondRock as part of this 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."
DiamondRock intends to fund the acquisition with a combination of borrowings under the company's 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, based on its closing stock price as of July 9 subject to a floor of $10.00 and a cap of $10.50.
DimondRock expects to complete the acquisition in July 2012. The completion of the acquisition is subject to customary closing conditions and is not subject to a financing or due diligence condition or the receipt of third-party consents. The company made a $50 million initial deposit upon execution of the purchase agreement that is non-refundable except in the case of a material default by the sellers or the sellers' failure to satisfy a closing condition.
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