AFM Hospitality Corporation (TSX: AFM) today announced that it has entered into an agreement to merge all the assets of Boutique Hotels & Resorts International(R) based in Miami, Florida into a new U.S. subsidiary to be incorporated, AFM Premier Alliances, Inc. Subject to completion of a definitive agreement and further approvals, the transaction is expected to close on or before March 30, 2004. Following TSX approval, AFM will complete the transaction primarily for stock and other consideration.
The deal includes alliance and membership agreements for luxury, independent hotels and resorts throughout the world, including such well-known names as the five-star Reef Resort in the Grand Cayman, Scotts Hotel - a meticulously restored 18th century townhouse in Mallorca, the Mountvista Boutique Hotel - a five-star award winning hotel in Queenstown, New Zealand, the La Maison Bord'eaux - a charming 18th century French Inn, and the Baan Yin Dee Boutique Hotel in Phuket, Thailand, with its luxurious Boran Thai-style accommodations. More than 40 member hotels and resorts from Palm Beach to Napa Valley, and Park City to New York City, along with the many international capitals are featured in Boutique Hotels & Resorts International(R) exclusive alliance.
Boutique Hotels & Resorts International(R) is a premier source to the discerning traveler for genuine, chic boutique hotels and resorts from around the world, from hip to historic, traditional to contemporary, from castle to designer hotel, and from pure country inn to luxury resort. Boutique Hotels & Resorts International(R) lodging properties are all distinctively unique in architectural style, sophisticated interior design, or decorative theme, with the finest standards of personalized service.
Boutique Hotels & Resorts International(R) provides independent hotel and resort properties with a distinctive yet discreet international brand identity, a state-of-the-art reservations system, innovative marketing, worldwide sales and other services that are usually available to corporate chain hotels only.
Membership affiliation is offered in three distinct categories or product tiers: The Diamond Collection(R) (five-star and upscale four-star hotels and resorts), The Emerald Collection(R) (four-star properties) and The Sapphire Collection(R) (upscale three-star hotels and inns).
"AFM anticipates that Boutique Hotels & Resorts International(R) will provide us with a prominent means to penetrate the independent upscale segment," said Lawrence P. Horwitz, AFM Chairman and CEO. "Boutique Hotels & Resorts International(R) gives AFM Hospitality our own luxury brand to continue our expansion in North America as well as worldwide. Boutique Hotels & Resorts International(R) complements our existing AFM Hospitality brands."
Martin Buehler, Boutique Hotels & Resorts International(R) Chairman and CEO, commented, "Our alliance and membership organization has been built to take advantage of state-of-the-art Internet technology, especially in the reservations area and electronic marketing. The advances Boutique Hotels & Resorts International(R) has put in place will also assist other AFM Hospitality customers and individually-managed properties. As part of AFM Hospitality Corporation, we will help AFM expand into new markets with a brand that is extremely attractive to the largely untapped independent hospitality segments in these markets. Our member hotels will benefit from AFM's extensive resources and purchasing power. The alliance of AFM Hospitality with Boutique Hotels & Resorts International(R) brings greater strength to our members."
AFM will continue to operate the acquired business under the Boutique Hotels & Resorts International(R) name as part of its new Premier Alliances Division of AFM Hospitality, to be headed by Boutique's Chairman, CEO and founder, Martin H. Buehler. AFM Chairman & Chief Executive Officer, Lawrence P.Horwitz, stated, "Boutique Hotels & Resorts International(R) is clearly complementary to AFM's related hospitality franchising and management businesses. Boutique has earned an excellent reputation among the finest worldwide luxury and independent boutique hotels and resorts. With the support of AFM's resources and management team, we see a tremendous opportunity to expand its services and grow the company in a rapid and dramatic manner." In addition, Mr. Horwitz continued, "Martin Buehler and his team add further strength to AFM's internet marketing services."
"With Boutique Hotels & Resorts International(R), AFM Hospitality gains a dynamic and readily identifiable membership service that we can grow, globally. AFM Hospitality will now accelerate the expansion of our luxury hotels - with an immediate increase of more than 40 'flagship' properties. Our mission is to make our customers more competitive, help them build market share, and enable them to attract and recruit the best available people - and the addition of the Boutique Hotels & Resorts International team provides AFM with a unique set of new resources to help us deliver on those promises."
AFM is now Canada's largest multi-brand lodging franchisor and one of North America's leading hospitality management companies, with open and/or executed franchise, management or service agreements with more than 250 hotels, restaurants, and other nationally-franchised service businesses throughout the United States and Canada.
The traveler's interest in boutique hotels began a couple of decades ago and that interest is growing even faster today. In recent years, many of the largest chain hotels have introduced their own brands of boutique hotels to capitalize on this trend and represent formidable competition for the independent operator here and abroad.
Boutique Hotels & Resorts International(R) has been created to provide these independent boutique hospitality properties with the boutique brand and identity, innovative global niche marketing and the latest in state-of-the-art reservation systems and Internet distribution. Using the latest technology, guests may talk or chat online directly with the boutique hotel of their choice, free of charge from the Boutique Hotels & Resorts International(R) reservations page on its website; guests can also make an instant booking online or be connected to a friendly multilingual guest agent at no charge.
This agreement is tentatively scheduled to take effect by March 30, 2004. The resulting deal is subject to certain regulatory approvals. Under the present terms, in exchange for all the assets of Boutique Hotels & Resorts International(R) and the related intellectual property from First Capital Hospitality Financial Group, the sellers will receive preferred shares of AFM stock with certain conversion rights, notes and other consideration, as well as the right to an earn-out participation in the success of the related business over the next five years.
"Our transaction with AFM is a strong win-win for both companies," said Martin Buehler, Chairman and CEO of Boutique Hotels & Resorts International(R). "By working together we will provide our visitors with some of the most unique and luxurious hotel and resort experiences around the world. We look forward to our management team continuing as the newest division of AFM. I am pleased that all our employees will continue to be a part of the AFM/Boutique Hotels & Resorts International(R) team."
About Boutique Hotels & Resorts International(R)
Boutique Hotels & Resorts International(R) is a branded alliance of independent boutique hotels and resorts from around the globe. Some are small, with as few as 12 rooms, some as many as 200 or more, but all provide the most sophisticated amenities and personalized service. Our goal is to present our guests with roughly 200 of the very best hotels and resorts from around the world, which are genuinely boutique and distinctive - not just small or independent, and to include a unique flavor of history, destination, style and design - without compromising services that guests have come to expect from upscale hotels. For our members, our goal is to be the ultimate source for unique and exclusive boutique hotels and resorts, to provide top-drawer reservation and communication services, and to enable each of our hotels to excel in guest satisfaction and service that is second to none.
About AFM Hospitality Corporation
AFM Hospitality Corporation owns AFM Preferred Alliance Group Inc. (one of Canada's largest hotel and restaurant equipment and supply purchasing companies), AFM Asset Management, Inc., AFM Hospitality (USA) Corporation, Northwest Lodging International (USA) Inc., Northwest Lodging International (Canada) Inc., AFM Asset Management Services, Inc., Trigild International, Inc., Special Asset Services, Inc., and Staffing Services International, Inc. It is the exclusive Canadian Master Franchisor for Aston, Best Inns, Hawthorn Suites, Howard Johnson, Knights Inn, La Quinta, Park Plaza, Park Inn, Traveller's Inn and Villager Lodge. AFM Corporation operates or has open and/or executed franchise and management agreements with 250 hotels, restaurants and other nationally franchised service businesses throughout North America. The company's focus is to increase the number of hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements, provide valuable resources and hospitality experience to help hotel owners grow their business, and to acquire other franchise businesses related to the hospitality industry, while making available property management services. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSX: AFM).
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