Hyatt plans purchase of AmeriSuites

CHICAGO — Hyatt Corp. disclosed plans Thursday to buy the 143-hotel AmeriSuites chain in an estimated $600 million-plus deal that analysts said makes the luxury hotel company more of a well-rounded rival to much bigger Marriott International Inc. and Hilton Hotels Corp.

The sale amount was not announced by either Hyatt, which is owned by the wealthy Pritzker family, or The Blackstone Group Inc., seller of New Jersey-based AmeriSuites. But a source familiar with the deal, speaking on condition of anonymity, put it at more than $600 million.

The deal expands Hyatt into mid-price-range hotels targeting business and convention travelers, four years after it ventured into economy lodging with the acquisition of U.S. Franchise Systems Inc. and its budget Microtels.

Luxury lodging has long been the hallmark of Hyatt, which has annual revenues from its hotels of about $5 billion.

Hyatt Hotels Corp., its domestic arm, operates more than 120 full-service luxury hotels and resorts in North America and the Caribbean, in addition to luxury retirement communities and casinos. The overseas unit, Hyatt International Corp., has another 80-plus hotels and resorts in 39 countries.

AmeriSuites hotels are somewhat upscale, with all suites and amenities such as kitchenettes and fitness rooms. But they offer fewer services than typical Hiltons.

"Consistent with our family's tradition, we believe this acquisition represents a key strategic opportunity for growth and profitability for Hyatt," said Nicholas Pritzker, chairman of Hyatt Development Corp. "The future growth of AmeriSuites will complement the continuing growth of Hyatt's full-service hotel portfolio."

The transaction is expected to close early next month.

The move is a key part of the company's plan to reorganize into Global Hyatt Corp., a new parent firm that includes real estate activities and corporate functions.

It also comes amid open talk of taking the company public in the future.

Robert LaFleur, an industry analyst for Susquehanna Financial Group in New York, said Hyatt officials are first trying to "fill out their dance card" with lower-priced franchise hotels.

"What Hyatt is doing is diversifying from their foundation as a luxury hotel company and trying to position themselves similarly to a Marriott or a Hilton," LaFleur said. "With all the background noise that's going on with the Pritzker family, and a lot of discussion about a potential IPO at some point down the road, they can start having a Hyatt that is a fully diversified company with multiple brands and multiple price points."

Hyatt's reorganization followed an agreement among 11 Pritzker cousins to split up their family's multibillion-dollar empire.