Hyatt Hotels has confirmed it will purchase the assets of LodgeWorks, a private hotel development, ownership and management company.
The acquisition includes 24 hotels and related assets, including management, franchise and intellectual property rights for an aggregate purchase price of approximately $802 million in cash.
Key members of the LodgeWorks management and development team are expected to join Hyatt as part of the transaction.
The hotels being purchased are key assets in strategic, high barrier to entry markets and are currently branded under the Hotel Sierra (17), AVIA Hotels (4), Hyatt Place (1) and Hyatt Summerfield Suites (2) brands.
The acquisition will enable the company to introduce Hyatt-branded hotels in nine markets where it currently is not represented at all and to establish its extended stay presence in 16 new markets.
Following the transaction, 16 Hotel Sierra hotels will be branded as Hyatt Summerfield Suites, increasing the number of hotels in that portfolio from 38 to 54.
Five properties, including the AVIA Hotels, are expected to be converted to full service Hyatt brands. The brand affiliations of Hyatt Summerfield Suites and Hyatt Place properties in the LodgeWorks portfolio will remain unchanged.
“This is a significant expansion of our presence in the United States and enhances our extended stay representation with a great collection of high quality hotels,” said Mark Hoplamazian, president of Chicago-based Hyatt Hotels.
“We know that for Hyatt Summerfield Suites to become the preferred brand among extended stay guests, we must increase the number of markets we serve.
“This transaction is a noteworthy step in that direction, and will give us an immediate boost in brand awareness among both guests and potential third party developers.”
The hotels will be managed by Hyatt following the closing of the transaction, which is anticipated to occur in the third quarter 2011.