Ashford to Pay $275M for Hotel Management Platform
- Jun 05, 2019
Ashford Inc. has agreed to buy Remington Holdings LP’s hotel management platform for $275 million, in a move to diversify its hospitality-related business. Remington currently provides hotel management services for the Ashford-advised, NSYE-listed REITs Ashford Hospitality Trust Inc. and Braemar Hotels & Resorts Inc.
Through the transaction, expected to close in the fourth quarter of 2019, Ashford will gain Remington’s management portfolio of nearly 90 hotels with more than 17,400 keys of full-service and select-service properties, operating under more than a dozen brands across 28 states and Washington, D.C. The business had adjusted EBITDA of roughly $23.4 million in 2018.
Ashford anticipates the deal will boost its enterprise value to more than $600 million and will broaden its business scope, which currently includes hotel asset management, project management, audiovisual services, mobile keyless entry technology, wellness technology, resort services and brokerage. The Dallas-based firm will now have the exclusive right to provide these services to hotels acquired by its advised REIT platforms in the future.
Ashford bought Dallas-based Remington’s project management business last year for $203 million.
In a prepared statement, Ashford said that the acquisition of a high-margin, low-capex business would rapidly build the company’s operating scale and increase its earning potential. The deal will also give the asset management firm the potential to expand its business to other third-party clients. Ashford is listed on the NYSE American and the transaction, which awaits stockholder approval and other conditions, will result in all Ashford-affiliated companies being publicly held.
Ashford Hospitality Trust, one of Ashford’s two advised REITs, has a portfolio of 122 properties with more than 25,000 keys, according to its corporate website. Most of the properties operate under premium Hilton, Hyatt, Marriott and Starwood brands. In April of last year, the trust refinanced 22 hotels with a new loan totaling $985 million.
In the same month, Ashford Hospitality Prime Inc. officially changed its name to Braemar Hotels & Resorts Inc., in an effort to differentiate the luxury REIT from its “sister” trust, which has a broader focus.