CHICAGO – The Pritzker family's Hyatt Corp. (search) said Thursday it plans to buy the AmeriSuites hotel chain from The Blackstone Group Inc. (search) in a deal reportedly worth more than $600 million.
The deal will add midrange, affordable properties aimed at the coveted business and convention travelers to Hyatt's upscale hotels and resorts, said Thomas Pritzker, chairman and CEO of Hyatt Corp.
"Consistent with our family's tradition, we believe this acquisition represents a key strategic opportunity for growth and profitability for Hyatt," said Nicholas Pritzker, chairman of Hyatt Development Corp. "The future growth of AmeriSuites (search) will complement the continuing growth of Hyatt's full-service hotel portfolio."
The transaction is expected to close in early January, company officials said. Terms of the deal were not disclosed, but the Chicago Tribune and The Wall Street Journal reported that Hyatt was likely to pay in excess of $600 million for the New Jersey-based company.
Hyatt Corp. President Doug Geoga said last year that the company was interested in "dramatic and significant" growth for the company, despite a challenging economic environment. Company officials signaled Thursday that Hyatt may seek additional properties to acquire.
"Growth potential in the upscale limited service category is significant both in the U.S. and internationally," said Steve Goldman, Hyatt's executive vice president of acquisitions and development. "Hyatt will analyze opportunities for expanding the new brand in strategic markets around the world."
The move is key part of the company's plan to reorganize into Global Hyatt Corp., a new parent company that includes real estate activities and corporate functions, officials said.
Hyatt's reorganization came in the wake of an agreement among 11 Pritzker cousins to split up their family's multibillion-dollar empire, sparking rumors of an initial public offering, but executives have insisted that no decision has been reached.
Together, Hyatt Hotels Corp. and Hyatt International Corp. own or operate 212 upscale hotels and resorts with annual revenue of about $5 billion. Fifty-eight percent are in the United States, Canada or the Caribbean.
Some of its competitors are far bigger. Marriott International Inc.'s (MAR) chains include 2,600 hotels, and Hilton Hotels Corp. has 2,000.
The Blackstone Group is a private investment firm with a track record of investing in hotels and commercial properties. It acquired Prime Hospitality Corp. in August in a $970 million deal, including debt. A Blackstone spokesman declined to comment Thursday on the Hyatt deal.
The hotel industry is suffering from travel and spending cutbacks by business and convention travelers, which have forced companies to lower room rates.
A rift in the Pritzker family went public last November when 18-year-old Liesel Pritzker (search) sued her father and other members of the well-known Chicago family, which controls more than $15 billion in assets. Pritzker, who performs under the name Liesel Matthews and starred in the 1995 movie "A Little Princess," says her father systematically emptied her trust funds of $1.3 billion in the mid-1990s.