Apollo Investments buys hotel REIT for $1.5bn

NASDAQ-listed Apollo Investment Corporation has acquired Innkeepers USA Trust for $1.5bn in cash.

Publicly traded business development company Apollo Investment Corporation, an affiliate of private equity firm Apollo Management, has acquired hotel real estate investment trust Innkeepers USA for $1.5 billion (€1.1 billion). The investment firm is paying $17.75 per share of Innkeeper stock and the assumption of the REIT’s debt.

Innkeepers owns 27 hotels with 10,259 rooms in 21 states and the District of Columbia. The properties are branded under the Residence Inns, Summerfield Suites and Hampton Inns banners.

Apollo usually provides mezzanine loans in buyout transactions, but the company is pursuing the Innkeepers deal on an opportunistic basis, which will feed the NASDAQ-listed firm’s dividend, according to a Wall Street source.

Innkeepers released a statement regarding the acquisition. “We believe this is a compelling all-cash transaction that provides substantial value for Innkeepers’ shareholders,” Jeffrey Fisher, Innkeepers chief executive officer and president, said in the statement. “[Apollo] has a deep understanding of our business and we are looking forward to completing this transaction.”

Earlier this week the REIT sold the 96-suite Sunrise Suites in Tinton Falls, New Jersey to an undisclosed buyer for $6.4 million.