Acquisition Significantly Expands Company's Presence in High-Growth Sun Belt Markets
Accretive to Earnings and Leverage-Neutral to Balance Sheet
AUSTIN, Texas - Summit Hotel Properties, Inc. (NYSE: INN) (the "Company" or "Summit") today announced that it has entered into a definitive contribution and purchase agreement to acquire a 27-hotel portfolio totaling 3,709 guestrooms, two parking structures and various financial incentives through its existing joint venture with GIC for total consideration of $822 million (the "Transaction") from affiliates of NewcrestImage. The total consideration for the Transaction is comprised of $776.5 million, or $209,000 per key, for the 27-hotel portfolio, $24.8 million for the two parking structures and $20.7 million for the various financial incentives.
"We are thrilled to announce this transformational investment opportunity for the acquisition of 27 hotels that are complementary to our existing portfolio of high-quality, well-located assets and significantly expands our presence in high-growth Sun Belt markets. We have creatively structured the transaction with the issuance of both common and preferred operating partnership units and continued our partnership with GIC, which will preserve nearly all our existing liquidity of approximately $450 million. We expect the transaction to be immediately accretive to earnings and leverage-neutral to our balance sheet leaving us ample investment capacity to continue to grow our portfolio," said Jonathan P. Stanner, the Company's President and Chief Executive Officer "The announcement reinforces our optimism about the outlook for our business and validates our unique ability to source and pursue a broad range of capital alternatives and external growth opportunities given our strong liquidity profile, well-positioned balance sheet, and overall resilient portfolio," continued Mr. Stanner.
"We at NewcrestImage are extremely honored and proud to craft this transaction with the outstanding team at Summit Hotel Properties. NewcrestImage has assembled a collection of high-quality distinctive Marriott, Hilton, Hyatt, and IHG hotel properties throughout the Sun Belt region, which will be a great addition to Summit's portfolio. As we will become one of Summit's largest shareholders, we have confidence in Summit as one of the industry's leading owners with a highly regarded public platform. We believe the two portfolios create an excellent combination of hotels that have tremendous growth potential and are well-positioned to create long-term shareholder value as the lodging recovery continues," said Mehul Patel, Managing Partner and Chief Executive Officer of NewcrestImage.
