DiamondRock Acquiring Renaissance Waverly and Renaissance Austin
BETHESDA, MD., November 19, 2006. DiamondRock Hospitality Company ("DiamondRock") (NYSE: DRH) today announced that it has entered into a definitive binding agreement to acquire the 521-room Renaissance Waverly Atlanta Hotel and the 492-room Renaissance Austin Hotel. The hotels will be acquired for a combined purchase price of $237.5 million, and the transaction is expected to close before the end of the year. The combined purchase price represents 10.8 times our projected 2007 earnings before interest, taxes, depreciation and amortization (or "EBITDA") generated by the two hotels.
"These two acquisitions are right-on-strategy for our company. We were able to acquire very high-quality hotels in strong markets at reasonable prices. We also believe that Renaissance is a brand on the rise," commented William W. McCarten, Chairman and Chief Executive Officer of DiamondRock.
The Renaissance Waverly is the best known hotel in the well established Northwest market of Atlanta. Northwest Atlanta is the second largest office sub-market in Atlanta and is world headquarters to Home Depot as well as home to major offices of IBM, Lockheed Martin, and Coca-Cola. Within its market, the hotel has the best location, attached to the Cobb Galleria Centre, a 320,000 square foot convention center, and is a short walk to the Cumberland Mall. Additionally, the hotel has some of the largest meeting space in greater Atlanta with 65,000 square feet of premier meeting and exhibition space.
The Renaissance Austin Hotel is the most prominent hotel in Austin's Arboretum submarket along Research Boulevard, the technology corridor of Austin. The area is the world headquarters to Dell Computers as well as home to major offices for other technology companies such as IBM, Motorola, Advanced Micro Devices, Applied Materials, National Instruments, and Samsung. Austin is also home to the state government of Texas and the University of Texas. The hotel has been dominant in its submarket because of its location, brand, and generous 60,000 square feet of meeting space.
"These hotels are poised for excellent growth, which will be enhanced by $12 million in renovations during 2006. The renovations include revenue enhancing projects such as adding 14 new keys at the Austin hotel and repositioning the Waverly hotel's food & beverage offerings. Additionally, the exceptionally large and high quality meeting and public spaces at the hotels make them the hotels-of-choice for meeting planners and irreplaceable assets," added John Williams, President and Chief Operating Officer of DiamondRock.
This press release contains forward-looking statements within the meaning of federal securities laws and regulations.
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