Red Lion Hotels Corp. (RLHC) has announced it has entered into a definitive agreement to acquire Vantage Hospitality Group for an initial aggregate price of US$23 million in cash and 690,000 shares of the company’s common stock, which closed Monday at US$6.96 per share.
The move grows RLHC’s franchised hotel network to over 1,100 with 73,200 rooms from 113 hotels and 14,200 rooms.
Additional aggregate compensation of up to US$7 million in cash and an additional 690,000 shares may be earned contingent upon the achievement of certain performance metrics at the first and second anniversaries of the transaction. The additional consideration includes a US$1 million minimum cash payment on the first and second anniversaries.
RLHC expects the transaction to be earnings accretive in the 12 months immediately following the closing. The transaction is expected to close in the fourth quarter 2016.
“The acquisition of Vantage Hospitality Group’s operations establishes RLHC as one of the largest hotel franchisors adding approximately 1,000 hotel franchise, membership, and licensing agreements to our growing brand family,” commented Greg Mount, president and CEO of RLHC.
Mount added that Vantage’s current leadership and staff in Coral Springs will become the hub for all RLHC select-service brand operations.
“We are excited to become part of the RLHC family of brands,” said Roger Bloss, founder, president and CEO of Vantage. “Joining RLHC’s platform will provide our members with additional resources to grow their businesses and our guests with a broad array of brands to enjoy. Vantage’s COO, Bernie Moyle, and I are proud that we will be contributing to RLHC’s strategic growth plan and are excited about leading the select-service brands initiative.”
RLHC will acquire substantially all of the hospitality-related assets and operations of Vantage and its parent company used in connection with the businesses conducted under the following names, as well as their brand extensions and international counterparts: Vantage Hotels; Americas Best Value Inn; Canadas Best Value Inn; Lexington by Vantage; America’s Best Inns and Suites; Country Hearth Inns; Jameson Inns; Signature Inn; and three Palms Hotels & Resorts.