Yesterday long-stay hotel chain Extended Stay America Inc was successful in completing its IPO, though not quite at the maximum expected price they were hoping for. The company priced its offering at US$20 per share, which was right in the middle of the range indicated in its earlier preliminary prospectus.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at email@example.com.
Even so they raised a lot of money, selling 28.25 million shares to raise gross proceeds of $565 million, before Underwriter’s fees and expenses of the issue, which still values the whole company at over US$4 billion. If an Underwriters’ overallotment should be effected that would raise a further US$85 million for the company as well.
Trading of the new shares will start on the New York Stock Exchange tomorrow. Its stock symbol is a cute one too, it will be “STAY” in another of the time-honoured, but ultimately a little lame, attempts at humour by corporate filers when they take their companies public. A better one perhaps would have been “REST” to show commitment to their customers, but that is another matter.
Deutsche Bank, Goldman Sachs and J.P. Morgan were the lead underwriters for the offering.
Having picked the company up from bankruptcy in 2012 the three private equity groups who still control it today, Blackstone Group, acting together with Paulson & Co and Centerbridge Partners, will now be diluted down to about 83%. However, with their share of the publicly listed stock now worth around US$3.4 billion, and only US$750 million of their own equity left in the deal they have really done very well.
Extended Stay America has already had a somewhat convoluted corporate history, which Jewish Business News described extensively in earlier reporting on this IPO last week. At the operating level it is clearly a good business with operating results growing nicely this year, and seems to have extremely capable management, led by former Starbucks head James Donaldץ