Hotel investment company Summit Hotel Properties Inc. is expected to go public this week in an initial public offering of about 23 million shares priced between $10.50 and $12.50 each.
The Sioux Falls, S.D. company was recently organized to continue the hotel investment business of Summit Hotel Properties LLC. The company plans to operate as a real estate investment trust, focusing on acquiring and owning midscale and upscale hotels without food and beverage segments.
Following completion of the offering, the company will have a portfolio of 65 hotels in 19 states.
Summit said its shares are expected to be listed on the New York Stock Exchange under the symbol "INN."
In addition to the 23 million shares in the offering, the company will sell up to $12.5 million in shares of common stock to an affiliate of InterContinental Hotels Group in a private placement.
Also, the underwriters of the IPO will have the option to buy up to 3.45 million to cover excess demand.
The company anticipates it could potentially receive as much as $288.9 million in net proceeds from the offering, private placement and the purchase of shares by underwriters, should they fully exercise their option.
Summit intends to use some $227 million of the net proceeds to pay down debt and about $10 million to fund capital improvements at its hotels. The balance of the proceeds will be used for general corporate and working capital purposes, including possible hotel acquisitions, the company said.
Summit filed for its IPO last August and disclosed its expected pricing last month.
For the nine months ended Sept. 30, the company recorded revenue of $104.8 million and a net loss of $493 million, or 2 cents a share.
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