Summit Hotel Properties

IPO Filing Date: Aug. 9, 2010

Expected IPO Date: Feb. 7, 2011

Amount of Proceeds Sought: $264.5 million

Expected Offering Price: $10.50 to $12.50

Expected Number of Shares to Be Sold: 23 million

Use of Proceeds: To eliminate certain debt covenants, to fund improvements at its hotels and for general corporate and working capital purposes, including potential hotel acquisitions.

Expected Ticker Symbol: INN ( INN) (NYSE)

Lead Underwriters: Deutsche Bank Securities, Baird and RBC Capital Markets

Co-Managers: KeyBanc Capital Markets, Morgan Keegan

About the Company: Summit Hotel Properties is a hotel investment company that was recently organized to continue and expand the existing hotel investment business of its predecessor, Summit Hotel Properties, LLC.

The predecessor focused on upscale and midscale hotels. Summit Hotel Properties said it wants to continue its predecessor's business of acquiring, owning, renovating, repositioning and aggressively managing hotel assets throughout the U.S.

The majority of Summit's hotels operate under franchise brands owned by Marriott International ( MAR), Hilton Worldwide, InterContinental Hotels Group ( IHG) and Hyatt ( H) Hotels and Resorts. Since Jan. 1, 2007, Summit has invested about $305 million in acquisitions and upgrades at its hotels.

About $10 million of net proceeds from the initial public offering will be used to make additional improvements to Summit's hotels.

The company posted total revenue of $121.2 million in 2009 compared with $135.1 million in 2008 and $113.9 million in 2007.

Summit Hotel Properties reported net loss of $15.1 million in 2009 compared with net income of $13.1 million in 2008 and $14 million in 2007.

One of the company's key business risks is that it has a significant amount of debt. Furthermore, certain debt covenants that Summit Hotel has agreed upon may reduce the operational flexibility of the company and its subsidiaries, increasing default risks.

IPO Scorecard:

Actual IPO Date: Feb. 9, 2011

Actual Proceeds Raised: $ 254 million

Actual Offering price: $9.75

Actual Number of Shares Sold: 26 million

First Day Closing Price: $9.69

IPO First Day Return: -0.6%

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