MeriStar Hotels & Resorts, Washington, D.C., and Interstate Hotels Corp, Pittsburgh, Pa., the nation's two largest independent hotel management companies, announced yesterday that they have signed a definitive agreement to merge. The newly formed company will operate more than 86,000 rooms in 412 hotels under 30 franchise brands in North America and Europe.
The merged companies will be known as Interstate Hotels Corp. and will include BridgeStreet Corporate Housing Worldwide and Doral Resorts & Conference Centers. Interstate will have estimated 2002 pro forma revenues of $340 million and estimated pro forma EBITDA of $33 million to $35 million. The transaction is valued at approximately $68 million, based on MeriStar's closing stock price of $1.21 on May 1, resulting in a total market capitalization of $260 million for the combined company, according to a MeriStar press release.
The company's headquarters will be in Washington, with a significant operating presence in Pittsburgh. Paul W. Whetsell, MeriStar chairman and CEO, and John Emery, president and COO, will continue in those roles. Thomas F. Hewitt, Interstate's chairman and CEO, will serve on the combined company's board of directors.
The merger is subject to approval of both companies' shareholders and the Hart-Scott-Rodino review process. The expected closing date is the third quarter of 2002.
Interstate Hotels Corp. is the nation’s second largest independent hotel management company, managing 135 hotels with more than 27,000 rooms in 36 states, the District of Columbia, Canada, and Russia, under more than 25 franchise brands.
MeriStar Hotels & Resorts Inc. is the nation's largest independent hotel management company, managing 277 hotels, resorts and conference centers with more than 58,000 rooms in 42 states, the District of Columbia, and Canada, along with four golf courses, under 30 franchise brands. The company owns the Doral brand name and BridgeStreet Corporate Housing Worldwide
For more information, visit www.meristar.com