La Quinta Holdings signed a definitive purchase and sale agreement to sell 24 owned hotels. This portfolio is geographically dispersed and the vast majority of these hotels will be removed from the La Quinta system. The sale price for these assets represents an attractive EBITDA multiple and the company expects to close the sale prior to the end of 2015, subject to customary closing provisions, providing additional balance sheet flexibility at that time.
As a result of this transaction, the company expects to see improvements in key operating metrics such as RevPAR and RevPAR Index, opening of additional markets for franchise development and reduction of near-term capital expenditure requirements.
"This is another positive step as we continue to enhance our portfolio and improve the overall brand experience for our customers," said Wayne B. Goldberg, president & CEO of La Quinta. "We are continuing to execute our strategy of optimizing the owned hotel portfolio. We are excited to be working with a group of key franchise partners in this transaction where we are able to monetize assets from our portfolio at an accretive multiple and grow our franchise pipeline, while allowing our franchise partners to acquire assets strategic to their businesses. As part of this transaction, the buyers have committed to work with us in developing several franchised La Quinta hotels in key markets. As this transaction illustrates, we remain committed to finding ways to improve our performance and grow long-term shareholder value."