Sonesta International Hotels has entered into an agreement to acquire Red Lion Hotels' parent company, RLH Corp., in an all-cash transaction valued at approximately $90 million, the companies announced Dec. 30.
The deal completes an exceptional year for Sonesta, which during 2020 added 103 properties formerly managed by InterContinental Hotels Group and 122 properties that were under Marriott International flags. Both IHG and Marriott had gone into default on the hotels with owner Service Properties Trust, which also owns about 34 percent of Sonesta.
"Sonesta started 2020 as a manager of 58 hotels under three Sonesta-specific brands in the U.S.," said Sonesta president and CEO Carlos Flores in a statement. "Upon the completion of hotel conversions previously announced and the acquisition of RLH, Sonesta will become one of the largest hotel companies in the U.S., with approximately 1,200 hotels under a diverse set of 13 brands in multiple market segments."
Sonesta also announced that 35-year industry veteran Keith Pierce will join the company as executive vice president and president of franchise and development. Most recently, he served as president and managing partner of the Passionality Group, a hospitality investment and management advisory firm. Previously he worked at Wyndham Worldwide.
Under the terms of the merger agreement, holders of RLH's common stock will receive $3.50 per share in cash. The acquisition, which is expected to close in the first half of 2021, is subject to customary closing conditions, including the approval of RLH's shareholders. Upon completion of the transaction, RLH will become a privately held company and its common stock no longer will be listed on the New York Stock Exchange.