GREENWICH, CT—A few weeks after its CEO dismissed published reports that TMI Hospitality was about to be sold to Starwood Capital Group, TMI and Starwood Capital announced a deal Thursday for the private equity firm to do just that. Via a controlled affiliate of Starwood Global Opportunity Fund X, Starwood Capital will buy all of the outstanding stock of Fargo, ND-based TMI, giving the new owners control of a 188-hotel portfolio, TMI's management company and its development platform.

“The acquisition of TMI Hospitality, a proven and trusted property manager, offers Starwood Capital the exciting opportunity to build on our investments in select-service and extended-stay lodging,” says Suril Shah, SVP of acquisitions of Starwood Capital. “We are looking forward to continuing the legacy of TMI's development and management platform.”

Neither Starwood Capital nor TMI has divulged financial terms of the deal. Real Estate Alert reported in late May that Starwood Capital would buy substantially all of TMI's portfolio for $1 billion, a report that TMI CEO Lauris Molbert said was “completely false. There's no deal with Starwood Capital or anybody else.”

The acquisition greatly expands Starwood Capital's presence in the select-service and extended-stay sector. Currently, the Greenwich, CT-based firm has a portfolio of 103 properties in this space; the deal for TMI, which is subject to customary closing conditions, will nearly triple that portfolio's size. TMI's brands include Marriott, Hilton, Choice and Carlson

Citigroup Global Markets Inc. acted as lead financial advisor to TMI Hospitality, while Butcher Joseph Hayes also acted as financial advisor to TMI. Hentschel & Company provided a fairness opinion to TMI Hospitality's board of directors. Morrison & Foerster LLP and Morgan, Lewis & Bockius LLP are serving as legal counsel to TMI, while Starwood Capital received legal counsel from Latham & Watkins LLP and financial advice from BofA Merrill Lynch and Barclays.

The deal follows the close earlier this month of $1.3-billion joint venture between Chatham Lodging Trust and Northstar Realty Finance on the Innkeepers portfolio, a 51-asset group of select-service and extended-stay properties that Chatham and Cerberus Capital Management had acquired out of bankruptcy in 2011.Additionally, Bloomberg reported Thursday that the Blackstone Group was close to a deal to buy a group of select-service hotels from Clarion Partners for $800 million.