WASHINGTON — Red Lion Hotels Corporation (RLHC) has entered into a definitive agreement to acquire the global brands and brand operations of Florida-based Vantage Hospitality Group, Inc. for an initial aggregate price of $23 million in cash and 690,000 shares of the company’s common stock, which closed today at $6.96 per share.
Additional aggregate compensation of up to $7 million in cash and an additional 690,000 shares may be earned contingent upon the achievement of certain performance metrics at the first and second anniversaries of the transaction. The additional consideration includes a $1 million minimum cash payment on the first and second anniversaries.
“The acquisition of Vantage Hospitality Group’s operations establishes RLHC as one of the largest hotel franchisors, adding approximately 1,000 hotel franchise, membership and licensing agreements to our growing brand family,” says Greg Mount, president and CEO of RLHC. “Vantage has built a distinctive and highly successful platform over the last 16 years, owing to a strong culture that emanates from its leaders. As such, Vantage’s current leadership and staff in Coral Springs will become the hub for all RLHC select-service brand operations. We look forward to harnessing our collective strengths to drive growth for our franchisees, superior service for our guests and accretion for our shareholders.”
RLHC expects the transaction to be earnings-accretive in the 12 months immediately following the closing. The transaction is subject to customary closing conditions and expected to close in the fourth quarter 2016.
“We are excited to become part of the RLHC family of brands” says Roger Bloss, founder, president and CEO of Vantage. “Joining RLHC’s platform will provide our members with additional resources to grow their businesses and our guests with a broad array of brands to enjoy. Vantage’s COO, Bernie Moyle and I are proud that we will be contributing to RLHC’s strategic-growth plan and are excited about leading the select-service brands initiative.”