Leisure investment specialist KSL is buying Hersha Hospitality Trust in a deal worth $US1.4 bn – a premium of 60 per cent on the share price
Hersha owns 25 hotels with 3,811 rooms in the US, including The Rittenhouse Philadelphia, The Parrot Key Hotel and Villas in Key West, Florida and the Sanctuary Beach Resort in California
KSL has US$21bn of capital under-investment, holding or having held or invested in a wide range of businesses from Miraval and ESPA to recent acquisition – high-end health club operator, Third Space
KSL also owns Honors Holdings, one of the biggest Orangetheory franchises and multiple hotels and resorts globally
Investment firm KSL Capital Partners has acquired the Hersha Hospitality Trust, the company behind a
portfolio of spa hotels and resorts in the US.
The company owns 25 hotels with 3,811 rooms in New York, Washington DC, Boston, Philadelphia, South Florida and California, including The Rittenhouse Philadelphia, The Parrot Key Hotel and Villas in Key West, Florida and the Sanctuary Beach Resort in California.
It
sold seven of its properties for US$505m (£400m, €467m) in 2022 to concentrate on the luxury and lifestyle segment.
The KSL deal was valued at US$1.4bn (£1.1bn, €1.3bn), a premium of approximately 60 per cent on Hersha’s closing share price on 25 August – the last full trading day prior to the announcement.
The transaction is expected to close in the fourth quarter of 2023, subject to customary conditions.
Certain members of Hersha’s executive management team and affiliated trusts have already signed separate voting agreements under which they agreed to support of the proposed transaction.
If the deal goes through, the company will be delisted from the New York Stock Exchange.
KSL is a serial investor in leisure assets, holding or having held or invested in a wide range of businesses from Miraval and ESPA to recent acquisition – high-end health club operator,
Third Space.
KSL has US$21bn (£7bn, €19bn) of capital under investment across equity, credit and tactical opportunities funds.
The company also owns Honors Holdings, one of the biggest Orangetheory franchises and multiple hotels and resorts globally, including The Pig Hotels and Village Hotels in the UK, Bailllie Lodges in Australia, New Zealand and South America and multiple St. Regis, Sheraton, Hyatt and Hilton properties in the US. It also owned destinations spas such as Soneva Fushi and Soneva Jani in the Maldives.
KSL bought the Martin Hotels portfolio in March and a majority interest in Sereno Hotels in July.
Jay Shah, Hersha executive chair, said: “This transaction provides our shareholders with immediate and certain value at a substantial premium to our public valuation, while enabling us to refocus on growing the business over a longer period of time.”
CEO, Neil Shah, said: “This transaction is a result of our focus on lifestyle and leisure properties, as well as our work to create a portfolio consisting of some of the highest quality hotels in their respective markets.”
Marty Newburger, partner at KSL, added: “Hersha has built an impressive, curated portfolio of experiential luxury and lifestyle hotels and resorts in strategic markets. With KSL’s track record investing in high-quality assets in dynamic metropolitan markets across North America and around the world, we're uniquely suited to position the business for further success over the long term.”
