RLJ Development, LLC Agrees to Acquire 100 Hotels From White Lodging Services for $1.7 Billion
BETHESDA, Md., Privately held RLJ Development, LLC ("RLJ Development") controlled by Robert L. Johnson, founder of BET and owner of the NBA Charlotte Bobcats, announced today that it has signed a definitive agreement to acquire 100 hotels from White Lodging Services Corporation ("WLS") and its affiliates for approximately $1.7 billion.
A first group of 87 hotels is expected to close in the second quarter of 2006. The remaining 13 hotels, which are currently under construction or recently completed, are scheduled to close over the next 18 - 24 months. WLS will retain management of the hotels under long-term management agreements and the hotels, which are primarily leading brand franchises including Marriott and Hilton, will continue to operate under the same brand affiliations with long term franchise agreements also in place.
"We are thrilled to add these hotel properties to the RLJ Development portfolio," stated Robert L. Johnson, CEO and Chairman of RLJ Development, "In addition, we are excited about continuing and expanding our relationship with Bruce White and the White Lodging organization. I consider Bruce and his management team the best hotel management group in the country."
Bruce White, Chairman and CEO of WLS, stated "this transaction is consistent with White Lodging's objectives to create value in our operating company, generate liquidity for accelerated future growth in addition to an active development pipeline already in place totaling over forty projects, and to provide a foundation for long term stability. We are pleased to expand on our existing relationship with RLJ, who we have come to respect as consummate professionals, and look forward to continued growth as we work together to enhance the value of this high quality portfolio."
Thomas J. Baltimore, Jr., President of RLJ Development added, "This acquisition is consistent with our strategy to invest in upscale, focused service hotels with premium brands in desirable markets. Furthermore, the WLS portfolio is relatively young and a majority of the hotels are located in recovering markets with substantial growth potential. This is the type of profile that RLJ Development has consistently excelled in within our existing portfolio."
The WLS portfolio acquisition marks the second deal over a billion dollars lead by Robert L. Johnson. The first was the sale of Black Entertainment Television to Viacom, Inc. for $3 billion in January 2001. RLJ Development will become one of the largest Marriott franchisees in the United States with over 85% of the WLS portfolio properties affiliated with the Marriott family of brands.
About White Lodging Services Corporation | Established in 1985 and headquartered in Merrillville, Indiana, White Lodging Services is a fully integrated hotel ownership, development, and operating company -- a recognized leader that has defined and cultivated the ability to achieve consistent, sustainable growth among mid-to-large scale hotels across the country. Their portfolio of more than 100 hotels throughout the country encompasses representation of the following leading-brand hotels: Marriott; Renaissance; Residence Inn by Marriott; Courtyard by Marriott; Fairfield Inn & Suites by Marriott; SpringHill Suites, Hampton Inn; Hilton Garden Inn; Radisson Hotels; and Intercontinental Hotel Group.
About The RLJ Companies | The RLJ Companies ("RLJ"), founded by Robert L. Johnson, founder of Black Entertainment Television, provides strategic investment and direction in and for a diverse portfolio of companies in the financial services, real estate, hospitality/restaurant, professional sports, film production, gaming and recording industries. The RLJ Companies' core businesses include: RLJ Development, a privately held hotel real estate investment company and RLJ Urban Lodging Fund, a private equity real estate fund, which together have over $1 billion in combined assets; RLJ Asset Management Group, which includes RLJ Select Investments, LLC, a hedge fund of funds joint venture with Deutsche Bank AG and RLJ Equity Partners, LLC, a private equity fund formed in partnership with The Carlyle Group; NBA Charlotte Bobcats, WNBA Charlotte Sting and Charlotte Arena Operations; Caribbean Gaming and Entertainment (C.A.G.E.), a video lottery terminal company; RolloverSystems, Inc., a retirement services company, and Three Keys Music, a jazz recording company.
Note: Certain matters discussed herein are forward-looking statements within the meaning of the Private Litigation Reform Act of 1995. Certain, but not necessarily all, of such statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should," "estimates" or "anticipates" or the negative thereof or comparable terminology. All forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual transactions, results, performance or achievements of the Company to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. These may include: (i) national and local economic and business conditions or governmental regulations that will affect demand, prices, wages or other costs for hotels; (ii) the level of rates and occupancy that can be achieved by such properties; (iii) the Company's ability to compete effectively in areas such as access, location, quality of properties and rate structures; (iv) the ability to maintain the properties in a first-class manner (including meeting capital expenditure requirements); (v) the availability and terms of financing; (vi) changes to the need for compliance with environmental licensure and safety requirements; and (vii) the ability to find available acquisitions and investment opportunities. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions and business opportunities, it can give no assurance that its expectations will be attained or that any deviations will not be material. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
