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DiamondRock Closes On The $495 Million Hotel Portfolio From Blackstone

Stocks in this article: DRH

BETHESDA, Md., July 16, 2012 /PRNewswire/ --  DiamondRock Hospitality Company (the "Company") (NYSE: DRH) today announced that it completed the acquisition of a portfolio of four hotels from affiliates of Blackstone Real Estate Partners VI ("Blackstone") for a contractual purchase price of approximately $495 million.  The hotels acquired are the Hilton Boston Downtown, the Westin Washington D.C. City Center, the Hilton Burlington, and the Westin San Diego (collectively, the "Acquisition Portfolio"). 

(Logo: http://photos.prnewswire.com/prnh/20040708/DCTH028)

Mark Brugger, Chief Executive Officer of DiamondRock, said, "This off-market acquisition enhances our portfolio quality and growth prospects while adding to our brand and geographic diversity. In addition to growth from the ongoing recovery in lodging fundamentals within these markets, we believe that there are a number of upside opportunities within the Acquisition Portfolio that can be achieved through smart capital investment and aggressive asset management initiatives. Additionally, we welcome Blackstone as a significant shareholder and look forward to building on that relationship." 

Jonathan D. Gray, Global Head of Real Estate at Blackstone stated: "We are pleased to close this transaction with DiamondRock, a company with solid assets and a strong management team led by Mark Brugger.  We believe in the continued lodging recovery and are excited about receiving an ownership stake in the company."

The acquisition was funded with a combination of borrowings under the Company's senior unsecured credit facility, cash on hand, net proceeds from the Company's recent public offering of common stock and the issuance of shares of the Company's common stock to Blackstone in a private placement. 

Goldman, Sachs & Co. acted as the primary financial advisor to the Company in connection with the acquisition. BofA Merrill Lynch also provided financial advisor services to the Company in connection with the transaction.

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