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06/2007

EXTENDED STAY AMERICA acquired by LIGHTSTONE GROUP

UNITED STATES Hospitality & Leisure / Hospitality / Hotels & Accommodation EV $1–10bn

Context

The Lightstone Group acquired Extended Stay Hotels from affiliates of Blackstone on June 12, 2007. The transaction saw the New York private real estate investment firm take full control of the lodging company, which at the time operated 687 properties and approximately 76,000 rooms across 44 states and Canada under brands including Extended Stay America, Homestead Studio Suites, Extended Stay Deluxe, StudioPlus, and Crossland. Equity for the transaction was provided alongside The Lightstone Group by Arbor Realty Trust, while affiliates of Blackstone rolled over an interest to retain an equity stake in the lodging business. Financing for the buyout consisted of mortgage and mezzanine debt arranged by Wachovia Bank and Bear Stearns, alongside debt facilities provided by Merrill Lynch Mortgage Lending and Bank of America. Citi served as lead financial advisor to The Lightstone Group, with Herrick Feinstein and Proskauer Rose acting as legal counsel. Dechert acted as legal advisor to Arbor Realty Trust. Bear Stearns, Blackstone Corporate Advisory, Banc of America Securities, and Merrill Lynch served as financial advisors to Blackstone, while Simpson Thac

It is worth noting that the fund Blackstone took control of Extended Stay America through an LBO in 2004.

EXTENDED STAY AMERICA, which reported an EBITDA margin of [members only] in 2007, is valued in this transaction at an EV/EBITDA multiple of 10x–18x, representing a premium to the average currently observed in the Retail & Consumer sector (11.8x).

-> Deep-dive in Retail & Consumer market trends

Target

Extended Stay America owns and operates extended-stay hotels across the United States, with properties designed for guests who stay for weeks rather than a single night. The company was founded in January 1995 and is headquartered in Spartanburg, South Carolina, where its head office operations are based. Its hotels are located across a broad set of states and accommodate guests in suites equipped for longer occupancy. Rooms are sold through the company's own website, a call center and a loyalty program, and the offer targets business travelers, relocating professionals and other guests needing extended accommodation. Alongside its owned portfolio, the company franchises a portion of its hotels to third-party operators.

Ent. Value

$1–10bn

Equity Value

[members only]

Multiples

EV / Revenue

[members only]

EV / EBITDA

10x–18x

EV / EBIT

[members only]

Historical Financials (USD)

Year
Rev
EBITDA
EBIT
2007
[members only]
$450–900M
[members only]
2006
[members only]
$450–900M
[members only]

Other operations with EXTENDED STAY AMERICA

Other operations with EXTENDED STAY AMERICA

List of similar M&A transactions (Date, Acquirer, Target, Country, Sub-sector)
DateAcquirerTargetCountrySector
03/2021BLACKSTONE / STARWOOD CAPITAL GROUPEXTENDED STAY AMERICAUNITED STATESHotels & Accommodation
03/2004BLACKSTONEEXTENDED STAY AMERICAUNITED STATESHotels & Accommodation

REFERENCES

Valuation range: EV $1–10bn

EBITDA range: $450–900M

EV/EBITDA range: 10x - 18x

Note: This page provides detailed data on a private equity M&A transaction. Detailed and exact financial metrics for the acquisition of EXTENDED STAY AMERICA by LIGHTSTONE GROUP are reserved for mynth community members. Register for free to unlock full data.

Authors: This transaction was contributed by a verified mynth contributor and cross-checked against available transaction documents and official company communications.

Target: extended stay america

Acquirer: lightstone group