Interstate-Meristar Merger to Close by Summer

NEW YORK CITY-A merger agreement signed by Pittsburgh-based Interstate Hotels Corp. and MeriStar Hotels & Resorts of Washington, DC is expected to close by summer, creating one of the world’s largest independent hotel management companies.

The new entity, which will keep the Interstate Hotels Corp. name, will operate more than 86,000 rooms in 412 hotels. Representing more than 30 franchise brands in North America and Europe, the company will include BridgeStreet Corporate Housing Worldwide and Doral Resorts & Conference Centers. Its 2002 pro forma revenue is estimated at $340 million and EBITDA of $33 million to $35 million is expected. Value of the deal is roughly $68 million.

Though it will retain a strong presence in Pittsburgh, the company will be headquartered in Washington, DC. Paul W. Whetsell, MeriStar chairman and CEO, and John Emery, president and COO, will continue in those roles for the merged company. Interstate’s chairman and CEO Thomas F. Hewitt will serve on new board of directors. The board initially will include six members nominated by MeriStar and seven members nominated by Interstate, five of which will initially be representatives from Interstate’s investor group.