Aimbridge Hospitality, Interstate Hotels to Merge
The combined company will be a global force in third-party management, providing services to a portfolio of more than 1,400 properties spanning 20 countries.
Aimbridge Hospitality and Interstate Hotels & Resorts will soon become one. The lodging companies have entered into a definitive agreement calling for the companies to merge and operate as a leading provider at the forefront of third-party hotel management services.
The newly formed hotel management entity will boast a portfolio exceeding 1,400 branded and independent lodging properties spanning 49 U.S. states and 20 countries. The Aimbridge-Interstate merger is on schedule to close by the end of 2019.
READ ALSO: Is Cooling Ahead for the Hotel Market?
Aimbridge, the largest independent hotel management company in North America, launched in 2003 and today the company has an 800-property management portfolio across the U.S., Canada and the Caribbean, where it added six resorts just weeks ago in mid-August.
Third-party hotel management company Interstate made its debut in 1960. Currently, the independent corporation is responsible for 600 existing and planned properties in 15 countries. Its portfolio includes the planned Le Méridien hotel in Orange County, Calif., the wellness-centric Hilton Miami Dadeland and a 13-hotel collection of Western U.S. properties—Holiday Inn Express & Suites Santa Ana – Orange County in Santa Ana, Calif., and Element Chandler Fashion Center in Chandler, Ariz., among them—that the company began managing for Glacier House Hotels in June of this year.
Global private equity investors Advent International, majority owner of Aimbridge, will own a majority stake in the combined company, which will have a strategy focused on international expansion. The merger agreement between Aimbridge and Interstate comes three years after private equity firm Kohlberg & Co. acquired Interstate from Thayer Lodging and Jin Jiang International Hotels, and roughly six months after Advent purchased its controlling interest in Aimbridge from Lee Equity Partners and General Atlantic.
Lodging consolidation, large and small
The deal comes on the heels of an active, big-ticket 2018 for lodging industry consolidation, with such transactions as Pebblebrook Hotel Trust’s acquisition of LaSalle Hotel Properties for $5.2 billion; Marriott Vacations Worldwide’s $4.6 billion acquisition of ILG Inc.; and Wyndham Hotels & Resorts’ $2 billion purchase of La Quinta Holdings’ hotel franchising and management business.
Hotel M&A activity has been robust in 2019, too; however, as noted in a JLL report earlier this year, most of the larger platform deals have already happened. As predicted in the report, more private transactions with smaller platforms have materialized in 2019, such as NexPoint Hospitality Trust’s agreement in July to acquire Condor Hospitality Trust for $318 million. Still, the year has produced multibillion-dollar deals as well, including Park Hotels & Resorts Inc.’s planned purchase of Chesapeake Lodging Trust for $2.7 billion.
