DALLAS, April 18, 2022 /PRNewswire/ -- Ashford Inc. (NYSE
American: AINC) ("Ashford" or the "Company") today announced that
Remington Hotels ("Remington"), a dynamic, growing, independent
hotel management company with over 40 years of experience in the
hospitality business and a wholly-owned portfolio company of
Ashford, has acquired privately held Chesapeake Hospitality
("Chesapeake"), a premier third-party hotel management company.
Ashford is acquiring Chesapeake for an initial consideration of
$15.75 million, payable with
$6.3 million in cash and $9.45 million of a new Series CHP Convertible
Preferred Unit, which will pay a 7.28% annual dividend and have a
$117.50 conversion price per share.
Chesapeake will also have the ability to earn up to $10.25 million of additional consideration based
on its base management fee contribution for the trailing 12-month
("TTM") periods ending March 2024 and
March 2025 for a total potential
consideration of $26 million. Should
Chesapeake's performance result in the full earnout for the seller,
Ashford expects $5.3 million of
EBITDA contribution for the full year of 2024, which would
represent an acquisition multiple of 4.9x EBITDA.
With 65 years of experience helping hotel owners and real estate
investors in the eastern United
States, Chesapeake joins Remington with a complementary
vision and mission. Chesapeake is known for its legacy of creating
asset value by performing re-brandings and re-positionings, and has
a reputation for helping client hotels achieve their full potential
through exceptional guest experiences and reliable performance.
The strategic transaction is expected to increase the scale and
scope of Remington's hotel management business while expanding
Remington's geographic footprint to complementary Midwestern
markets, including Pittsburgh,
Milwaukee, Detroit, and St.
Louis. Further, the acquisition adds several IHG Hotels
& Resorts to its portfolio, as well as the 877 key Showboat
Atlantic City, which will be the largest hotel in Remington's
portfolio. The combined company will operate under the Remington
brand and will be focused on leveraging its enhanced scale to
pursue profitable growth opportunities, including the continued
expansion of hotel management business to third parties. This
transaction also diversifies Remington's client base away from the
Company's advised REITs. As a result of the acquisition,
Remington's mix of third party hotels will increase from
approximately 20% to approximately 40%.
"Though the hospitality space has faced massive challenges over
the past few years, Remington has remained steadfast in its
commitment to being the best hotel manager in the industry,"
commented Remington President and
Chief Executive Officer, Sloan Dean.
"By melding Chesapeake's culture and know-how with ours, we believe
we are well-positioned to cultivate even stronger relationships
with our properties' owners by providing them with more resources,
better economies of scale, and a more satisfying guest
"I'm so proud that Chesapeake is joining Remington, a company
that is known for its stellar results and has made a real cultural
shift in the hotel management space," said Chris Green, former President and CEO of
Chesapeake and newly appointed Divisional President of Remington
Hotels. "This partnership will be a practice in blending two
companies that have operated in different geographical lanes and
have a steadfast commitment to doing what is best for their clients
and employees. I'm looking forward to taking the service our
clients know and love to the next level as we access the resources
Remington has to offer."
"This is a powerful combination of two highly complementary and
synergistic businesses, and we are confident this transaction will
come as a value-added partnership to our combined third-party
client base," commented Monty J.
Bennett, Ashford's Chairman and Chief Executive Officer.
"This is a terrific acquisition for Remington, and underscores
Ashford's commitment to supporting our portfolio companies as they
execute on organic and inorganic growth initiatives to create
With the completion of this acquisition, Remington now manages
121 hotels in 28 states across 25 brands, including 19 independent
and boutique properties. The combined company will be headquartered
in Dallas, where Remington's
management will oversee day-to-day operations of its entire
national portfolio of properties. Upon integration, all former
Chesapeake managed hotels will remain under the same teams to
ensure continued delivery of excellent service to owners and
Included in this press release are references to Chesapeake's
EBITDA contribution, which is a non-GAAP financial measure. The
Company is not providing a reconciliation of Chesapeake's expected
EBITDA contribution to Chesapeake's net income contribution because
the Company is unable to predict with reasonable certainty the
reconciling items that may affect net income without unreasonable
effort. These reconciling items are uncertain, depend on various
factors, and could significantly impact, either individually or in
the aggregate, the GAAP measures for the applicable period.
The Company presents Chesapeake's EBITDA contribution because it
is used extensively by our management and board of directors to
evaluate the impact of the acquisition of Chesapeake on our
operational performance. Accordingly, the Company believes that the
EBITDA contribution provides useful information to investors and
others in understanding and evaluating its operating results in the
same manner as its management team and board of directors.
This metric, however, has limitations as a financial measure, and
investors should not consider it in isolation or as a substitute
for analysis of our results as reported under GAAP. The Company
urges investors to carefully review the GAAP financial information
as shown in our subsequent periodic reports on Form 10-Q and our
Current Reports on Form 8-K.
Ashford is an alternative asset management company with a
portfolio of strategic operating businesses that provides global
asset management, investment management and related services to the
real estate and hospitality sectors.
Certain statements and assumptions in this press release,
including without limitation statements regarding Chesapeake's
EBITDA contribution, contain or are based upon "forward-looking"
information and are being made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this press release include, among
others, statements about the Company's strategy and future plans.
These forward-looking statements are subject to risks and
uncertainties. When we use the words "will likely result," "may,"
"anticipate," "estimate," "should," "expect," "believe," "intend,"
or similar expressions, we intend to identify forward-looking
statements. Such statements are subject to numerous assumptions and
uncertainties, many of which are outside Ashford Inc.'s
These forward-looking statements are subject to known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated, including, without
limitation: the impact of COVID-19, including one or more possible
recurrences of COVID-19 case surges that would cause state and
local governments to reinstate travel restrictions and the rate of
adoption and efficacy of vaccines to prevent COVID-19, on our
business and investment strategy; our ability to maintain
compliance with NYSE American LLC continued listing standards; our
ability to regain Form S-3 eligibility; our ability to repay,
refinance or restructure our debt and the debt of certain of our
subsidiaries; anticipated or expected purchases or sales of assets;
our projected operating results; completion of any pending
transactions; our understanding of our competition; market trends;
projected capital expenditures; the impact of technology on our
operations and business; general volatility of the capital markets
and the market price of our common stock and preferred stock;
availability, terms and deployment of capital; availability of
qualified personnel; changes in our industry and the markets in
which we operate, interest rates or the general economy; and the
degree and nature of our competition. These and other risk factors
are more fully discussed in the Company's filings with the
Securities and Exchange Commission.
The forward-looking statements included in this press release
are only made as of the date of this press release. Such
forward-looking statements are based on our beliefs, assumptions,
and expectations of our future performance taking into account all
information currently known to us. These beliefs, assumptions, and
expectations can change as a result of many potential events or
factors, not all of which are known to us. If a change occurs, our
business, financial condition, liquidity, results of operations,
plans, and other objectives may vary materially from those
expressed in our forward-looking statements. You should carefully
consider this risk when you make an investment decision concerning
our securities. Investors should not place undue reliance on these
forward-looking statements. The Company can give no assurance that
these forward-looking statements will be attained or that any
deviation will not occur. We are not obligated to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or circumstances, changes in
expectations, or otherwise, except to the extent required by
SOURCE Ashford Inc.