Blackstone and Starwood’s $6 Billion Acquisition of Extended Stay America

Simpson Thacher represented Blackstone, Kirkland & Ellis advised Starwood Capital Group, while Fried, Frank, Harris, Shriver & Jacobson advised ESA in the transaction.

 Extended Stay America, Inc. (“ESA”) and its paired-share REIT, ESH Hospitality, Inc. (“ESH”) (NASDAQ: STAY) signed a definitive agreement to be acquired by a 50-50 joint venture between funds managed by Blackstone Real Estate Partners and Starwood Capital Group in an all-cash transaction valued at approximately $6 billion. Completion of the transaction, which is expected to occur in the second quarter of 2021, is contingent upon customary closing conditions, including stockholder approval. In connection with the transaction, an affiliate of Starwood Capital Group, which owns approximately 9.4% of the paired shares, has agreed to vote its shares in favor of the transaction.

ESA and its brand Extended Stay America® is the leading brand in the mid-priced extended stay segment in the United States with 650 hotels. ESH is the largest lodging REIT in North America by unit and room count, with 564 hotels and approximately 62,500 rooms in the United States. ESA also franchises an additional 86 Extended Stay America® hotels.

Starwood Capital Group is a private investment firm with a core focus on global real estate, energy infrastructure and oil & gas.

Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has $187 billion of investor capital under management.

The Simpson Thacher team advising Blackstone included Brian Stadler, Matt Rogers, Janet K. Yu and Brendan Montgomery (M&A); Sas Mehrara, Whitney Salinas, Leanne Welds, Amy Oster and Michael Scala (Real Estate); Nancy Mehlman and Tyler Robbins (Tax); Andrew Blau, Joo Hyun Lee and Garrick Ehlers (Executive Compensation and Employee Benefits); Jonathan Ozner (Capital Markets); Lori Lesser (Intellectual Property); and Drew Harmon (Funds). 

Kirkland & Ellis advised Starwood Capital Group with a team led by corporate partners Michael Brueck (Picture) and Joshua Korff and real estate partner Scott Berger. The team also included corporate partners Maggie Flores and David Perechocky, real estate partners Jonathan Schechter, Chris Hartmann and Richard Grossman, tax partner Mike Beinus and antitrust partner Kate Rocco.

Involved fees earner: Michael Beinus – Kirkland & Ellis; Scott Berger – Kirkland & Ellis; Michael Brueck – Kirkland & Ellis; Maggie Flores – Kirkland & Ellis; Richard Grossman – Kirkland & Ellis; Christopher Hartmann – Kirkland & Ellis; Joshua Korff – Kirkland & Ellis; David Perechocky – Kirkland & Ellis; Katherine Rocco – Kirkland & Ellis; Jonathan Schechter – Kirkland & Ellis; Andrew Blau – Simpson Thacher & Bartlett; Garrick Ehlers – Simpson Thacher & Bartlett; Drew Harmon – Simpson Thacher & Bartlett; Joo Hyun Lee – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Nancy Mehlman – Simpson Thacher & Bartlett; Sasan Mehrara – Simpson Thacher & Bartlett; Brendan Montgomery – Simpson Thacher & Bartlett; Amy Oster – Simpson Thacher & Bartlett; Jonathan Ozner – Simpson Thacher & Bartlett; Tyler Robbins – Simpson Thacher & Bartlett; Matthew Rogers – Simpson Thacher & Bartlett; Whitney Salinas – Simpson Thacher & Bartlett; Michael Scala – Simpson Thacher & Bartlett; Brian Stadler – Simpson Thacher & Bartlett; Leanne Welds – Simpson Thacher & Bartlett; Janet Yu – Simpson Thacher & Bartlett;

Law Firms: Kirkland & Ellis; Simpson Thacher & Bartlett;

Clients: Blackstone Real Estate Partners; Starwood Capital Group;

Author: Martina Bellini