RLH Corp. will acquire the Knights Inn brand from Wyndham Hotel Group for $27 million in cash. The North America-based Knights Inn brand sits in the economy segment with 350 hotels across the U.S., Canada and Mexico, plus another 47 hotels in the pipeline.
Both RLH Corp. and Wyndham Hotel Group are in the midst of organizational transformations. Wyndham Hotel Group is slated to spin off of parent company Wyndham Worldwide during the second quarter. The group repositioned its 16 brands, including Knights Inn, in 2016, acquired the AmericInn brand in 2017 and is expected to close its $1.95 billion buy of La Quinta during the second quarter. Wyndham Hotel Group CEO Geoff Ballotti said during the company's most recent earnings call that the group is focused on growing organically in the midscale and extended-stay segments.
RLH Corp. is switching to an asset-light business model. During the company's earnings call late last month, president and CEO Greg Mount detailed changes within the organization to support the new model and said the company intended to pursue acquisition opportunities.
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The acquisition of Knights Inn will increase RLH Corp.'s franchise units by more than 30 percent, according to Mount. The transaction is expected to close during the second quarter of 2018. The aggregate $27 million price tag is subject to certain post-closing adjustments.