Home Inns & Hotels Management Inc. ( NASDAQ: HMIN) announced that it has completed an acquisition of 100% ownership of Anhui Youle Fashion Hotel Management Co., Ltd. and Anhui Meibang Hotel Management Co., Ltd. (collectively 'eJia Express') for a total of RMB59.8 million (approximately US$9.4 million) in cash.
eJia Express is a regional economy hotel chain in Anhui Province with 13 leased-and-operated hotels and a total of 1,284 rooms, including nine hotels centrally located in the city of Hefei, the provincial capital. All of the 13 eJia Express hotels will be rebranded to Home Inns and this will significantly increase Home Inns' brand presence in the region. The average remaining lease term for the 13 hotels is approximately eight years. Prior to the eJia acquisition, Home Inns Group operated in Anhui Province with 18 hotels under the Home Inns brand and 14 hotels under the Motel 168 brand.
"We are very excited about the completion of the eJia Express acquisition, which allows us to add 13 strategic hotel locations at a highly attractive valuation in the economically vibrant Anhui Province," said Mr. David Sun, Home Inns' Chief Executive Officer. "We expect to quickly integrate these hotels into the Home Inns brand portfolio which includes more than 1,100 hotels in China. We are confident that this acquisition will be additive to our overall business and will help us continue to create long term value for our shareholders."
The per room acquisition cost including conversion cost is expected to be below the average cost of per organically developed Home Inns hotel room. The total cash consideration averages to a per room consideration of approximately RMB47,000, and Home Inns expects to invest less than RMB10,000 per room for the conversion and rebranding of these hotels into Home Inn hotels. This will occur gradually over the next six months with minimum operational interruption.
Home Inns is a leading economy hotel chain in China based on the number of hotels and hotel rooms, as well as the geographic coverage of the hotel chain. Since Home Inns commenced operations in 2002, it has become one of the best-known economy hotel brands in China. Home Inns offers a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns' ADSs, each of which represents two ordinary shares, trade on the NASDAQ Global Select Market under the symbol "HMIN."
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