Hospitality group Red Lion is to significantly expand its portfolio of US hotels with a deal to acquire the GuestHouse International and Settle Inn and Suites brands from Boomerang Hotels.
The deal, worth an initial $8.5 million, with the potential of an additional payment of $1.5 million, will boost the number of Red Lion properties from 57 to 130 hotels across 30 states.
Most of the 73 franchised hotels will keep their current branding, Red Lion said.
The GuestHouse International brand was established in 1982 and Settle Inn was formed a decade later.
The two companies merged in 2006, but maintained separate branding.
"The addition of these established hotel brands in the attractive and growing economy segment provides us a national footprint and immediately delivers substantial economies of scale," said Greg Mount, CEO of Red Lion Hotels.
"We think this will drive value for our franchise owners and our shareholders. With five brands in three hotel segments, we will have a broader base to both expand with our existing franchisees, as well as attract new ones," Mount added.
