WILLIAMSBURG, Virginia—Sotherly Hotels Inc. announced that it has entered into a definitive merger agreement with a joint venture led and sponsored by affiliates of Kemmons Wilson Hospitality Partners, LP, with Ascendant Capital Partners LP serving as a strategic partner, under which the joint venture entity, KW Kingfisher LLC, will acquire all outstanding shares of Sotherly common stock for $2.25 per share in cash (the “Merger Consideration”).
The Merger Consideration represents a premium of 152.7 percent to the company’s closing share price on October 24, 2025, the last trading day prior to the announcement of the transaction, and a 126.4 percent premium to the volume-weighted average share price over the previous 30 days. The merger agreement has been unanimously approved by Sotherly’s full board of directors following a unanimous recommendation from a special committee comprised of independent directors of the Board.
Andrew Sims, Sotherly’s chairman of the board, stated: “This transaction provides our stockholders with a significant premium over Sotherly’s current share price, and represents the highest premium paid for a public, exchange-traded REIT in the past five years. The Special Committee, in consultation with our highly qualified outside financial and legal advisors, carefully evaluated this proposal and concluded it delivers compelling, immediate, and certain cash value to our stockholders.”
David Folsom, Sotherly’s chief executive officer, said, “This transaction is a testament to the high-quality portfolio that Sotherly has built over the past 20+ years as a publicly traded company, and we are confident this will pave a path towards future success for our hotels and the associates and guests that enjoy them every day.”
Webb Wilson, KWHP’s chief investment officer, added, “Sotherly has developed a distinctive portfolio of hotels across the Southeast. KWHP has a long history in investing in hospitality, particularly in the Southeast, and will bring additional resources to Sotherly’s unique and compelling portfolio of high-quality hotels to position them for continued success over the long term. We have been fortunate to have known and worked with the Sotherly team previously and look forward to furthering the relationship in our stewardship of these assets.”
Alex Halpern, chief investment officer of Ascendant, added, “Ascendant brings significant hotel operating expertise and hybrid financing solutions to bear, and we’re excited to work closely with KWHP to invest in and support the operation of these irreplaceable assets across attractive southeastern sub-markets.”
Affiliates of Apollo and Ascendant provided debt financing commitments to the Joint Venture in connection with the transaction.
The merger is expected to close in the first quarter of 2026, subject to approval by Sotherly stockholders and customary closing conditions. Andrew Sims, Sotherly’s chairman of the board and one of the company’s largest stockholders, has agreed to vote all of his shares in favor of the transaction.
Advisors
Piper Sandler & Co. is serving as exclusive financial advisor to the Special Committee, and Frost Brown Todd LLP is serving as legal advisor to the Special Committee.
Bass, Berry & Sims PLC is serving as legal advisor to KWHP. Milbank LLP served as debt counsel for KWHP. Berkadia is acting as the sole financial advisor and is arranging the financing for KWHP.
