Sonesta to acquire RLH for $90m

Eloise Hanson Eloise Hanson Uploaded 04 January 2021

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US: Sonesta International Hotels Corporation is to acquire RLH Corporation in the first half of 2021, making Sonesta one of the largest hotel companies in the States with approximately 1200 hotels.

RLH is the 10th-largest, US-based hotel franchise company with more than 900 hotels.

At the start of 2020, Sonesta managed 58 hotels under three brands in the US. Excluding the announced transaction, Sonesta will soon have almost 300 hotels across seven brands across the US, Canada, Chile, Colombia, Ecuador, Egypt, Peru, and St. Maarten.

After closing the transaction, Sonesta will become one of the largest US hotel companies with around 1200 hotels in diversified brands across multiple market segments.

Sonesta expects to fund the transaction with cash and/or through capital contributions from its shareholders. The deal is valued at US$90 million.

Keith Pierce will also join Sonesta as executive vice president of franchise and development. He served most recently as president and managing partner of the Passionality Group, a hospitality investment and management advisory firm.

Pierce said: "I am looking forward to welcoming RLH franchisees to Sonesta at this dynamic and promising moment in the company's growth. I also look forward to working closely with the RLH franchising community and building on the strong foundation RLH has created. I believe Sonesta is currently one of the industry's most exciting, forward-looking hotel companies. I look forward to helping propel the growth of Sonesta and working closely with the leadership team to continue building a world class hotel company."

Carlos Flores, president and chief executive officer of Sonesta, said: Whereas all of Sonesta's hotels in the US are currently self-managed, the acquisition of RLH significantly accelerates Sonesta's hotel franchising capabilities by adding a franchise platform with more than 900 hotels. With the addition of Keith to our leadership team, we also have an experienced executive ready to manage the RLH business upon closing this transaction and we are well positioned to grow Sonesta's franchising business in the future.”

In December, Sonesta announced it will be adding nine new hotels to its US portfolio. It will also be launching an upscale “focused-service” brand, Sonesta Select, which will have more than 70 locations by early 2021.

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