DiamondRock Completes Acquisition of the Hilton Minneapolis (United States)
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DiamondRock Completes Acquisition of the Hilton Minneapolis (United States)
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Category: North America & West Indies / Carribean islands - United States - Industry economy
- Group or hotel buyout
This is a press release selected by our editorial committee and published online for free on 2010-06-18
DiamondRock Hospitality Company (the "Company") (NYSE:DRH) today announced that it completed the acquisition of the 821-room Hilton Minneapolis (the "Hotel") for approximately $155.5 million. The seller was 1001 Marquette, LLC, a joint venture between Starwood Capital Group and Haberhill LLC. The Hotel is expected to generate $13.3 million of earnings before interest, income taxes, depreciation and amortization (or "EBITDA") for the full year 2010 based on the operator's most recent forecast. The total investment of $155.5 million represents an 11.7 times multiple of forecasted 2010 EBITDA. The Hotel is currently forecasting full year 2010 RevPAR growth of 7.5% with EBITDA expected to increase an impressive 19% compared to 2009. The Hotel is forecasting EBITDA of $8.4 million for the period from June 16, 2010 to December 31, 2010. The Hotel's 2011 group booking pace is up 13% compared to same-time-last-year.
"We are excited to close the acquisition of a Top 20 MSA institutional quality hotel with the best convention location in Minneapolis. The hotel was purchased on accretive metrics and is expected to achieve strong growth potential. This acquisition will also strengthen our existing relationship with Hilton Worldwide," stated Mark W. Brugger, Chief Executive Officer of DiamondRock Hospitality Company.
Minneapolis is a Top 20 MSA that is headquarters to 18 Fortune 500 companies. The 821-room Hilton Minneapolis is the largest hotel in the State of Minnesota and features 77,000 square feet of meeting space, including the largest hotel ballroom in the State. The Hotel is located near the Minneapolis Convention Center, and is convenient to Target Field and local shopping, dining, and all downtown attractions via the climate-controlled Skyway. The Hotel's previous ownership made significant capital expenditures to renovate and upgrade the guestrooms and meeting space and implemented numerous operational efficiency programs. Largely as a result of these efforts, during a difficult global macroeconomic environment the Hotel increased its profits, as measured by EBITDA, by almost 29% from 2006 to 2010.
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