Summit Hotel Properties, Inc. (INN) a real estate investment trust (:REIT), recently announced the pricing of 12 million shares at $8.15 each to enhance its liquidity. The company has also decided to grant the underwriters a 30-day option to purchase up to an additional 1.8 million shares. The offering is expected to close on October 3, 2012.
Summit Hotel will generate $93.0 million in net proceeds from the offering and the proceeds will contribute to its operating partnership.
The operating partnership intends to use the net proceeds from the offering to partly fund the purchase prices for the eight-hotel portfolio of unencumbered Hyatt hotels , the Hilton Garden Inn in Fort Worth, Texas and the Residence Inn in Salt Lake City, Utah. Additionally, the company also intends to use a portion of the net proceeds to reduce the outstanding balance under its senior secured revolving credit facility.
As of June 30, 2012, Summit Hotel had total outstanding debt of $298.4 million, including $54.4 million outstanding on its senior secured credit facility. At the end of the second quarter 2012, the company had $11.6 million in cash and cash equivalents.
Summit Hotel is focused on the acquisition and ownership of premium-branded hotels in the upscale and upper mid-scale segments of the lodging industry. Presently, the company’s hotel portfolio consists of 73 hotels with a total of 7,533 guestrooms located in 20 states.
Summit Hotel currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also have a long-term Neutral recommendation on the stock. One of its competitors, Host Hotels & Resorts Inc (HST) holds a Zacks #2 Rank, which translates into a short term Buy rating.
More From Zacks.com