Blackstone Real Estate Partners and Starwood Capital Group, in a 50/50 joint venture, have agreed to acquire Extended Stay America Inc. and its paired-share REIT, ESH Hospitality Inc. for $19.50 per paired share in an all-cash transaction valued at approximately $6 billion.
Tyler Henritze, head of US acquisitions for Blackstone Real Estate commented, “Travel and leisure is one of Blackstone’s highest conviction investment themes, and we have confidence in the extended stay model. We helped create this company nearly twenty years ago, and believe our expertise puts us in a unique position to add long-term value.”
Barry Sternlicht, CEO of Starwood Capital, added, “Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions. We are excited about the company’s growth opportunity as restrictions ease and we’re confident that, in partnership with Blackstone and the company, our team has the right experience to drive continued success.”
Bruce Haase, CEO and President of Extended Stay commented, “We are pleased to announce this transaction with Blackstone and Starwood Capital, two of the most experienced investors in the hospitality space with impressive track records of building value in a wide variety of real estate assets, and we look forward to this partnership and continued growth. The boards and senior management are especially grateful to the excellent team of leaders and associates who have made this company such a leader in the lodging industry and we are confident in the company’s continued success under private ownership.”
Goldman Sachs & Co. LLC is serving as financial advisor to Extended Stay and Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal counsel. JP Morgan and Citigroup Global Markets Inc. are acting as financial advisors and providing debt financing to Blackstone and Starwood. Simpson Thacher & Bartlett LLP is acting as legal advisor to Blackstone, and Kirkland & Ellis LLP is acting as legal advisor to Starwood Capital.