The Firm represents The Blackstone Group in its $3.1 billion cash acquisition of Extended Stay America, Inc. ESA is a NYSE-listed company that operates 475 extended-stay hotels in 42 states. Homestead Studio Suites, a Blackstone holding which currently operates 132 extended stay hotels, will oversee management of the ESA hotel portfolio. The transaction is subject to shareholder approval and other customary conditions and is expected to be completed during the second quarter of 2004.
The acquisition is being made jointly by Blackstone's real estate and private equity funds. It is believed to be the largest buyout of a public real estate company.
STB is also representing Blackstone in connection with a $2.6 billion mortgage financing from Bear Stearns and Bank of America. The proceeds of the financing, together with equity from Blackstone, will be used to pay the merger consideration and refinance ESA's existing bank debt and public notes. This financing is expected to be securitized in the largest single-asset commercial mortgage securitization to date.
The STB team working on the acquisition includes: Brian Stadler, Elena Centeio, Michael Morici and Robert Laplante (M&A); Greg Ressa, Scott Kobak, Sas Mehrara, Jill Allegretti, Erwin Dweck, Michael Rishty, Taryn Fielder and Alex Benjamin (Real Estate); John Hart, Gary Mandel, Rachel Birnbaum (Tax); Brian Robbins, Larry Moss and Wendy Swary (Benefits); Adeeb Fadil and Tim Mulvihill (Environmental). John Lobrano and Lauren Henkin are working on debt tenders and consent solicitations for two series of ESA's outstanding public notes.