Sonesta International Hotels Corporation To Acquire RLH Corporation, Creating One Of The World's Largest Hotel Companies With Diversified Brands Across Multiple Market Segments

Rhea-AI Summary

Sonesta International Hotels Corporation announced a definitive agreement to acquire RLH Corporation (NYSE: RLH), the 10th-largest U.S.-based hotel franchise company with over 900 hotels. This acquisition will significantly expand Sonesta's portfolio to approximately 1,200 hotels under 13 brands, enhancing its franchising capabilities. Keith Pierce, a seasoned hotel industry executive, will join Sonesta as Executive Vice President, President of Franchise & Development. The acquisition is set to close in H1 2021, pending shareholder approval, and will be funded through cash and capital contributions.

Positive

• Acquisition of RLH increases Sonesta's hotel portfolio to approximately 1,200 hotels.
• Enhances Sonesta's franchising capabilities with the addition of 900 existing hotels.
• Keith Pierce's leadership expected to drive growth in the franchising business.

Negative

• Transaction subject to customary closing conditions, including RLH shareholder approval, which may delay the acquisition.
• Funding via cash or capital contributions could strain Sonesta's financial resources.

NEWTON, Mass., Dec. 30, 2020 /PRNewswire/ -- Sonesta International Hotels Corporation (Sonesta) today announced that it has entered into a definitive agreement to acquire RLH Corporation (NYSE: RLH). RLH is the 10th-largest U.S.-based hotel franchise company with more than 900 hotels. After the closing of the transaction, Sonesta will become one of the largest hotel companies in the U.S. with approximately 1,200 hotels in diversified brands across multiple market segments. Sonesta also announced that upon closing of this transaction, 35-year hotel industry veteran Keith Pierce will be joining Sonesta as Executive Vice President, President of Franchise & Development.

Carlos Flores, President and Chief Executive Officer of Sonesta, made the following statement regarding today's announcement:

"Sonesta started 2020 as a manager of 58 hotels under three Sonesta-specific brands in the U.S. Upon the completion of hotel conversions previously announced and the acquisition of RLH, Sonesta will become one of the largest hotel companies in the U.S., with approximately 1,200 hotels under a diverse set of 13 brands in multiple market segments. Whereas all of Sonesta's hotels in the U.S. are currently self-managed, the acquisition of RLH significantly accelerates Sonesta's hotel franchising capabilities by adding a franchise platform with more than 900 hotels. With the addition of Keith to our leadership team, we also have an experienced executive ready to manage the RLH business upon closing this transaction and we are well positioned to grow Sonesta's franchising business in the future."

Keith Pierce joins Sonesta with more than 35 years' experience across the hospitality industry. He served most recently as President and Managing Partner of the Passionality Group, a hospitality investment and management advisory firm. Prior to that, he worked at Wyndham Worldwide, where he was Executive Vice President, Brand Operations for North America, and before that, President of Hotel Brand Operations for the Americas, and Group President for Hotels at Wyndham's predecessor company, Cendant Corporation.

Keith Pierce made the following statement regarding today's announcement:

"I am looking forward to welcoming RLH franchisees to Sonesta at this dynamic and promising moment in the company's growth. I also look forward to working closely with the RLH franchising community and building on the strong foundation RLH has created. I believe Sonesta is currently one of the industry's most exciting, forward-looking hotel companies. I look forward to helping propel the growth of Sonesta and working closely with the leadership team to continue building a world class hotel company."

The acquisition of RLH is currently expected to close in the first half of 2021 and it is subject to customary closing conditions, including the approval of RLH's shareholders. Sonesta expects to fund this transaction with cash-on-hand and/or through capital contributions from its shareholders. Hunton Andrews Kurth LLP is serving as legal counsel to Sonesta for this transaction.

About Sonesta

Sonesta is one of the fastest growing hospitality companies in the U.S., celebrating an approximate 350% increase in its managed hotel portfolio. Not including the transaction announced today, you will soon find nearly 300 Sonesta branded hotels across seven brands operating in the U.S., Canada, Chile, Colombia, Ecuador, Egypt, Peru, and St. Maarten. Discover Sonesta hotels, resorts, and suites in many of the most traveled U.S. destinations, including Atlanta, Austin, Boston, Chicago, Hilton Head, Houston, Los Angeles, Miami, New Orleans, Philadelphia, Portland, San Francisco, San Jose, San Juan, Seattle, St. Louis, and Washington D.C. For more about Sonesta and its locations, visit Sonesta.com or call +1.617.315.9200 or 800.Sonesta (800.766.3782) in the U.S. and Canada. Follow us on social media @SonestaHotels.

* High-resolution images are available at www.sonesta.com/media for all Sonesta hotels.

Media Contacts: 
Lorie Juliano
ljuliano@sonesta.com
office: 617.421.5429
mobile: 508.843.3769

Michael Frenkel
michael@mfcpr.com
(201) 317-7035

 

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SOURCE Sonesta International Hotels Corporation

FAQ

What is the significance of Sonesta's acquisition of RLH Corporation?

The acquisition will elevate Sonesta to one of the largest hotel companies in the U.S., expanding its franchise capabilities.

When is the acquisition of RLH expected to close?

The acquisition is expected to close in the first half of 2021, pending shareholder approval.

Who will lead the RLH business after the acquisition?

Keith Pierce will join Sonesta as Executive Vice President and lead the RLH business.

How will Sonesta fund the acquisition of RLH?

Sonesta plans to fund the acquisition through cash on hand and/or capital contributions from shareholders.

What impact does the RLH acquisition have on Sonesta's market position?

The acquisition significantly enhances Sonesta's market position and brand diversity in the hotel industry.