KSL Capital Partners acquires Hersha Hospitality Trust for $1.4 billion

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Published on 29/08/23 - Updated on 29/08/23

The Cadillac Hotel & Beach Club

KSL Capital Partners and Hersha Hospitality Trust have announced a definitive merger agreement reached on 27th August 2023. KSL will acquire all of Hersha’s outstanding common shares in an all-cash transaction valued at approximately $1.4 billion.

The acquirer, KSL, is a private equity firm that invests in travel and leisure businesses. Hersha is a real estate investment fund specialised in luxury and lifestyle hotels situated in US coastal gateway and resort markets, with a portfolio of 25 properties.

The purchase price of $10 per share represents a premium of approximately 60% over Hersha’s closing share price on 25th August 2023.

The merger agreement has unanimously recommended by the independent Transaction Committee of Hersha’s Board of Trustees and unanimously approved by Hersha’s full Board of Trustees.

The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including approval by the holders of a majority of Hersha’s outstanding common shares.

In 2016, KSL took over Outrigger’s portfolio of 37 properties in Hawaii, Guam, Thailand, Mauritius, and the Maldives.

This transaction provides our shareholders with immediate and certain value at a substantial premium to our public valuation. Following a multi-year comprehensive review by the independent Transaction Committee of Hersha’s Board of Trustees, the Board and management team are confident this step will allow us to deliver value for our shareholders while refocusing on growing the business over a longer period of time.

Jay H. Shah, Executive Chairman of Hersha Hospitality Trust

We are proud of the work our team has done to build on Hersha’s culture and capabilities and make the company what it is today. This transaction is a result of our deliberate actions to focus on key gateway markets and lifestyle and leisure properties, as well as our work to create a concentrated portfolio consisting of some of the highest quality hotels in their respective markets.

Neil H. Shah, CEO of Hersha Hospitality Trust

Hersha and its team have built an impressive, curated portfolio of experiential luxury and lifestyle hotels and resorts in strategic markets. With KSL’s extensive track record investing in high-quality assets in dynamic metropolitan markets across North America and around the world, we are uniquely suited to position the business for further success over the long term.

Marty Newburger, Partner at KSL Capital Partners

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