A long-in-the-works deal for an extended-stay hotel chain is finally coming to fruition.
Blackstone Group and Starwood Capital Group have acquired Extended Stay America for about $6 billion, Bloomberg News reported. The two private-equity firms are paying $19.50 per share for the hotel operator, according to the report.
Both companies have previously invested in the hotel chain. Starwood, headed up by Barry Sternlicht, recently paid $136.8 million for an 8.5 percent stake. Blackstone — which acquired the company in 2004 and then sold it in 2007 — had picked up a 4.9 percent stake in the chain. It was also part of a group that bought Extended Stay America out of bankruptcy and helped it go public in 2013.
The deal is the largest since the onset of the coronavirus pandemic, which has wrecked the travel industry. But as vaccines become more prominent, Blackstone and Starwood are betting on recovery.
“Travel and leisure is one of Blackstone’s highest conviction investment themes,” Tyler Henritze, Blackstone’s head of U.S. Acquisitions, said in a statement to Bloomberg News. “And we have confidence in the extended stay model.”
Extended Stay America is one hospitality provider that has managed to do well, despite the larger downturn in the sector because of the pandemic. Its revenue has declined, but not by as much as some its rivals, and revenue per available room stayed steady for part of last year.
[Bloomberg News] — Sasha Jones