Charlotte-based Extended Stay America is expected to hold an initial public offering next week that could raise up to $682 million.
The hotel chain filed paperwork in July with the U.S. Securities and Exchange Commission signaling its intention to go public, and IPO tracker Renaissance Capital lists it among 11 companies expected to sell shares next week.
The company, which owns and operates 682 hotel properties, said in a filing last month that it plans to sell up to 32.5 million shares, including additional shares that can be purchased by the underwriters, at a price between $18 and $21. It’s set to trade on the New York Stock Exchange under the symbol “STAY.”
In the offering, shareholders receive a share of Extended Stay and a share of a real estate investment trust, or REIT, called ESH Hospitality,which will trade together. An Extended Stay spokesperson could not be reached for comment on the IPO.
Extended Stay is going public during a busy year for IPOs, most notably the offering this week by Twitter that raised $1.8 billion for the mico-blogging site. For the first nine months of 2013, companies have raised a total of $32.8 billion in the IPO market, exceeding the $26.9 billion raised for all of 2012, excluding Facebook, according to PriceWaterhouseCoopers’ IPO Watch.
In the Charlotte area, healthcare company Premier Inc. and Hickory-based cablemaker CommScope have gone public this year.
Extended Stay’s offering is the latest twist in a turbulent corporate history. Founded in 1995, the once-publicly traded company went private in 2004 when it was bought by the Blackstone Group private equity firm. Then Extended Stay was sold in 2007 to a real estate firm for $8 billion, but it filed for bankruptcy in 2009 under a heavy debt load.
A group of private equity firms, including Blackstone, bought the company out of bankruptcy in 2010. In 2011, Extended Stay announced it was moving its headquarters to Charlotte from Spartanburg, S.C.
After next week’s offering, Extended Stay will have 200.5 million shares outstanding, 83 percent of which will be controlled by the private equity firms.
Jim Donald, the former chief executive of the Starbucks coffee shop chain, has been Extended Stay’s CEO since February 2012. In 2012, he received total compensation of $8.2 million, including $6.6 million in stock awards, according to last month’s filing. His pay also included $13,324 for the cost of commuting to Charlotte and $3,000 for the cost of lodging at Extended Stay hotels.
Extended Stay posted a profit of $98 million on $864.1 million in revenues in the first nine months of this year, up from a profit of $55.3 million on revenues of $760.9 million in the same period a year ago.
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