Target: Extended Stay America Inc
IPO Value: $100 million
Sponsors: The Blackstone Group, Paulson & Co, Centerbridge Partners
Underwriters: Deutsche Bank Securities, Goldman Sachs & Co, JPMorgan
The chain was sold for $3.9 billion at a bankruptcy auction in October 2010 to a group that included The Blackstone Group LP and hedge funds Paulson & Co and Centerbridge Partners, who each own about a third of the company. Extended Stay has hired Starbucks Corp’s former chief executive James Donald to lead the company as it looks to revitalize itself.
The U.S. lodging industry generated revenue of more than $162 billion in 2012, according to Smith Travel Research.
Private equity owners have been looking to take advantage of the recent rise in the stock market to exit investments made during the financial crisis. Other recent large deals involving private equity-backed companies include SeaWorld Entertainment Inc and Norwegian Cruise Line Holdings Ltd.
Extended Stay has not indicated the number of shares on offer or the price it intends to sell them at. Deutsche Bank Securities, Goldman Sachs & Co and JP Morgan are the lead underwriters on the offering.
Blackstone formed Extended Stay through a series of investments and teamed with Citigroup Inc in 2007 to sell the chain of about 680 hotels for $8 billion to David Lichtenstein, a little-known private equity investor. Extended Stay filed for bankruptcy protection in 2009 as the economic downturn took a toll on its business.
Tanya Agrawal is a correspondent for Reuters in Bangalore.