Apollo to Acquire Innkeepers in $1.5bil All-cash Transaction
APRIL 16, 2007. Innkeepers USA Trust (NYSE: KPA) ("Innkeepers") a hotel real estate investment trust (REIT) and a leading owner of upscale extended-stay hotel properties throughout the United States, including Residence Inns, Summerfield Suites and Hampton Inns, today announced that it has entered into a definitive agreement to be acquired by an affiliate of Apollo Investment Corporation, ("AIC") (Nasdaq: AINV) for $17.75 per share in cash, plus the assumption of Innkeepers indebtedness. Innkeepers will pay its first quarter common share dividend on April 24, 2007 and has agreed to suspend any further common share dividends.
"We believe this is a compelling all-cash transaction that provides substantial value for Innkeepers' shareholders," said Jeffrey H. Fisher, Innkeepers Chief Executive Officer and President. "AIC has a deep understanding of our business and we are looking forward to completing this transaction."
James Zelter, President and Chief Operating Officer of Apollo Investment Corporation, said, "Innkeepers provides stable, long term cash flow making it a valuable investment for AIC's shareholders. Importantly, we look forward to working with Innkeepers' proven management team and dedicated employees. While this is an important and significant step for AIC, our portfolio will continue to remain broadly diversified."
The transaction, which is subject to Innkeepers common shareholder approval and other customary closing conditions, is expected to be completed in the second quarter of 2007. The transaction is not contingent upon AIC or any of its affiliates obtaining financing. Following completion of the transaction, the properties will be managed by an affiliate of Jeffrey Fisher. Innkeepers will maintain its REIT tax status.
In connection with the transaction, Lehman Brothers and UBS Investment Bank are serving as financial advisors to Innkeepers and Wachtell, Lipton, Rosen & Katz is serving as its legal counsel. JF Capital Advisors is serving as financial advisor to AIC and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal counsel.
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