Marriott International, Inc. (MAR/NYSE) today announced that it has completed the acquisition of ExecuStay Corporation (EXEC/NASDAQ), a leading provider of leased corporate apartments in the U.S. Marriott has officially renamed the business, ExecuStay by Marriott, and is the first hospitality management company to enter the estimated $3 billion corporate housing services industry.
In connection with the acquisition, Marriott paid approximately $52.9 million in cash and issued approximately 2.1 million shares of Marriott common stock to ExecuStay stock and option holders. Marriott also assumed approximately $13.5 million in debt, net of existing assets. Marriott International expects the acquisition to be neutral to earnings per share in 1999, and accretive thereafter.
ExecuStay by Marriott is a strong extension to the company`s lodging portfolio and offers a wide range of customized apartment accommodations for long term stays of 30 days or more. With over 6,000 units in 44 states and the District of Columbia, ExecuStay provides “one-stop shopping” for fully furnished and accessorized apartments which include all utilities, phone, cable TV and maid service. ExecuStay owns no residential real estate and provides corporate apartments through short-term lease arrangements between ExecuStay and a network of unaffiliated property owners and managers. ExecuStay can locate and furnish a corporate residence within 24 hours notice. Rental periods average one to three months at a rate of approximately $2,200 per month.
Included as a product offering of ExecuStay by Marriott is Marriott International`s residential and commercial apartment cleaning business, HomeSolutions by Marriott. This combination of businesses positions Marriott as a leader in a growing, but fragmented industry composed mainly of unbranded companies with the top four representing just 20 percent of the market.
“We anticipate tremendous growth opportunities in the corporate housing segment,” said Joseph Ryan, Marriott International executive vice president and head of ExecuStay by Marriott. “Marriott can add value to the business by leveraging its global sales force, worldwide reservations system, Internet booking capability, business development and procurement programs.”
ExecuStay co-founder, Gary R. Abrahams, will remain president and chief executive officer of ExecuStay by Marriott. The leadership team also includes ExecuStay`s chief financial officer, Marc Kaplan, and chief operating officer, Robert Zaugg. Joining ExecuStay from Marriott is Lee LaRochelle who has been named senior vice president of operations for ExecuStay by Marriott. Headquarters for ExecuStay by Marriott will remain in the Washington, D.C. area.
Founded in 1986, ExecuStay operates 32 offices throughout the U.S. with a total of 525 employees, and currently generates approximately $150 million in annual revenues.
For more information on ExecuStay by Marriott, you may contact (toll-free) 888-840-7829 or visit their website: www.execustay.com.