Extended Stay Inc. announced that it has successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July.
A spokesperson for the Sponsors said, "We are enthusiastic about the opportunity to invest in Extended Stay Inc., which has maintained market leadership throughout the challenges of the past two years. After reducing its debt burden by nearly $5 billion, Extended Stay will have the flexibility to improve its customer experience and offerings. We all look forward to a successful partnership with Gary DeLapp and the entire management team as they lead the Company to future growth."
Gary DeLapp, president and CEO of HVM, L.L.C., the separately owned company that manages the hotels throughout the U.S. and Canada, said he was extremely gratified that all hotels remained open and operating during the restructuring process.
"I am particularly grateful to our associates, suppliers and travel partners for their support during this process, especially in light of the difficult circumstances in which we and the entire industry have been operating," Mr. DeLapp said, adding that HVM would continue to manage the portfolio of 685 properties despite the change in ownership.
Mr. DeLapp said, "I am excited that we can now focus all of our efforts on serving our guests and giving them a comfortable, convenient and affordable experience whether they stay for a night, a week, a month or longer," adding that the Company's near-term capital plan includes significant investment in major property improvements and renovations.
With the close of the transaction, Doug Geoga becomes non-executive chairman of the Board. Mr. Geoga previously served as president of Global Hyatt Corporation. The board will also include Will Kussell, former president and chief brand officer of Dunkin' Donuts.
The law firm of Weil, Gotshal & Manges LLP served as lead bankruptcy counsel for Extended Stay, and Lazard Ltd. served as its financial advisor. Fried, Frank, Harris, Shriver & Jacobson LLP and Houlihan Lokey served as legal and financial advisors to the Sponsors, respectively. Simpson Thacher & Bartlett LLP provided additional legal advice to Blackstone and Centerbridge, and Gibson, Dunn & Crutcher and Kleinberg, Kaplan, Wolff & Cohen provided additional legal advice to Paulson.
Based in Spartanburg, S.C., Extended Stay Hotels has 685 locations in the U.S. and Canada. It is the largest company-owned and operated chain of extended stay hotels in North America and employs approximately 9,000 in its headquarters and hotel properties.
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