Extended Stay America

Extended Stay America, Inc.
Formerly called
 Extended Stay Hotels
Public
Traded as NYSE: STAY
Industry Hotels
Founded January 9, 1995 (1995-01-09) in Fort Lauderdale, Florida
Founders
Headquarters Charlotte, North Carolina, United States
Number of locations
 629 hotels (2015)
Area served
 North America
Key people
 Gerardo I. Lopez (CEO)
Jonathan S. Halkyard (CFO)
Revenue Increase US$1.3 billion (2015)
Increase US$500.1 million (2015)
Increase US$283.0 million (2015)
Total assets Increase US$4.5 billion (2015)
Total equity Increase US$1.5 billion (2015)
Number of employees
 8,500
Website www.extendedstayamerica.com

Extended Stay America, Inc. is the operator of an economy,[1] extended-stay hotel chain consisting of 629 properties in the United States and Canada. It is listed on the New York Stock Exchange as a "paired share" with the real estate investment trust ESH Hospitality, Inc., the owner of the hotels. Extended Stay America is headquartered in Charlotte, North Carolina.

History

Extended Stay America was founded on January 9, 1995 in Fort Lauderdale, Florida by a George D. Johnson, Jr. and Wayne Huizenga, both former executives from Viacom and its subsidiary Blockbuster.[2] The first two Extended Stay America hotels opened in August 1995 in Spartanburg, South Carolina and Marietta, Georgia.[3] The company was listed on the NASDAQ on December 14, 1995.[4] Extended Stay America acquired the extended-stay hotel chain StudioPLUS on April 11, 1997.[5] The company also developed the Crossland Economy Studios brand as a budget, extended-stay hotel compared the mid-priced StudioPLUS and economy Extended Stay America brands.[6] The corporate headquarters was moved to Spartanburg in September 2001.

Blackstone Group

The Blackstone Group, a private equity firm, acquired Extended Stay America in May 2004 for a total cost of US$3.1 billion in cash and debt.[7][8] At the time of the merger, Extended Stay America operated 475 hotels; Blackstone increased that number with the addition of 132 from Homestead Studio Suites.[8] Homestead, which was founded by Security Capital in 1992, had been acquired by Blackstone in November 2001 for US$740 million.[9] All of Blackstone's extended-stay hotels—consisting of the Crossland, Extended Stay America, Homestead, StudioPlus, and, eventually, Extended Stay Deluxe brands—were managed together by Extended Stay Hotels.

An Extended Stay Deluxe hotel in Hillsboro, Oregon

Blackstone sold Extended Stay Hotels in June 2007 to the The Lightstone Group for US$8 billion.[10] The deal, financed with US$7 billion of debt, was one of several multibillion-dollar hotel and casino sales made that year.[11] On June 15, 2009, Extended Stay America filed for bankruptcy protection under Chapter 11.[12] After the Great Recession decimated leisure and business travel, Extended Stay faced shortages in liquidity stemming from the leveraged buyout by Lightstone two years before. Through debtor-in-possession financing, it was able to continue operating rather than to face liquidation.[12]

In July 2010, an investment consortium made up of Blackstone, Paulson & Co., and Centerbridge Partners bought Extended Stay America through a bankruptcy auction for US$3.93 billion.[13] After its successful reorganization, Extended Stay America emerged from bankruptcy in October 2010. A year after the bankruptcy, Blackstone was sued by creditors of Extended Stay America alleging that Blackstone "skimmed" US$2.1 billion off of the sale to Lightstone and knew that the amount of debt would have been for unsustainable for the hotel chain; Blackstone settled the lawsuit in June 2013 for US$10 million.[14]

Relisting

In 2013, Blackstone filed for initial public offerings (IPO) for Extended Stay America and another hotel company it owned, Hilton Worldwide; a third, La Quinta Inns & Suites, IPO-ed in 2014.

See also

References

  1. ↑ "STR Chain Scales – North America and Caribbean" (PDF). STR, Inc. Mar 2016. Retrieved Apr 9, 2016.
  2. ↑ Form S-1 1996, pp. 3–4.
  3. ↑ Form S-1 1996, p. 21.
  4. ↑ Form S-1 1996, p. 12.
  5. ↑ "Extended Stay America, Inc.". Form 8-K. U.S. Securities and Exchange Commission. Apr 11, 1997. p. 2. CIK 0001002579. Retrieved Dec 17, 2015 – via EDGAR.
  6. ↑ "Extended Stay America, Inc.". Form 10-K. U.S. Securities and Exchange Commission. Mar 4, 1997. p. 10. CIK 0001002579. Retrieved Dec 17, 2015 – via EDGAR.
  7. ↑ "Extended Stay America, Inc.". Form 8-K. U.S. Securities and Exchange Commission. May 11, 2004. CIK 0001002579. Retrieved Dec 18, 2015 – via EDGAR.
  8. 1 2 "The Blackstone Group to Acquire Extended Stay America, Inc." (Press release). The Blackstone Group. Mar 5, 2004. Retrieved Dec 18, 2015.
  9. ↑ "Security Capital Sells Homestead Village to Blackstone Affiliate for $740 Million" (Press release). The Blackstone Group. Nov 20, 2001. Retrieved Dec 18, 2015.
  10. ↑ "The Lightstone Group Closes $8 Billion Acquisition of Extended Stay Hotels From The Blackstone" (Press release). The Blackstone Group. Jun 12, 2007. Retrieved Dec 18, 2015.
  11. ↑ "Lightstone to buy Extended Stay Hotels for $8 bln". Reuters. Apr 17, 2007. Retrieved Dec 18, 2015.
  12. 1 2 Nadgir, Santosh (Jun 15, 2009). "Debt-strapped Extended Stay files for bankruptcy". Reuters. Retrieved Dec 20, 2015.
  13. ↑ Emery, Chelsea (Jul 20, 2010). "US judge backs Extended Stay's reorganization plan". Reuters. Retrieved Dec 20, 2015.
  14. ↑ Hals, Tom (Jun 20, 2013). "Blackstone settles Extended Stay lawsuit for $10 million". Reuters. Retrieved Dec 20, 2015.

Sources

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