Interstate Hotels & Resorts Acquires Hilton Garden Inn in Baton Rouge, La.
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Interstate Hotels & Resorts Acquires Hilton Garden Inn in Baton Rouge, La.
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Category: North America & West Indies / Carribean islands
This is a press release selected by our editorial committee and published online for free on 2006-06-28
Interstate Hotels & Resorts (NYSE: IHR), the nation's largest independent hotel management company, today announced that it has acquired the 131-room Hilton Garden Inn in Baton Rouge, La. for $14.4 million, or $110,000 per key. The purchase price is approximately 9.0x projected 2006 EBITDA of $1.6 million (operating income of $1.1 million plus $0.5 million of depreciation expense). The acquisition was funded with a combination of cash on hand and cash available on the company's senior credit facility. This acquisition was included in the company's previously issued earnings guidance on May 3, 2006. It is the third wholly owned and first select-service property the company has acquired since February 2005, as part of its announced strategy to diversify its earnings base. Interstate also will manage the hotel.
"This is a newly constructed hotel -- less than two years old -- in excellent physical condition and the only select-service hotel in the Baton Rouge Airport market," said Thomas F. Hewitt, chief executive officer. "The Baton Rouge market and this hotel benefited significantly from the huge influx of residents, businesses and government agencies that relocated there, many permanently, due to the effects of hurricane Katrina. We are very optimistic about the hotel's long-term growth potential."
"The hotel is well located, convenient to the airport, downtown Baton Rouge, two universities, several large oil and natural gas company installations, and other demand generators," said Leslie Ng, chief investment officer. "And as the only Hilton Garden Inn in Baton Rouge and with other Hilton branded hotels a good distance away, this property enjoys a commanding position in the Hilton reservation system."
Located on Harding Boulevard adjacent to the entrance of the Baton Rouge Metro Airport, the hotel is situated in Howell Place, a 290-acre mixed use commercial development and home to Exxon, Chevron, and the Baton Rouge Surgical Center. Property amenities include a 48-seat restaurant and lobby bar, approximately 1,500 square feet of meeting space, heated pool, spa and fitness center and a business center. Guest rooms include a microwave oven, minibar, and complimentary high-speed Internet access with secure printer.
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