Aimbridge Hospitality, the world's largest third-party hotel management company, has reached a new deal with its first lien lenders. They will become Aimbridge's majority owners as part of restructuring the company's balance sheet.
The restructuring support agreement would convert more than $1.1 billion in debt to equity as well as give Aimbridge an infusion of $100 million in new capital, according to a news release. Aimbridge's total outstanding debt of $1.3 billion would be reduced to a maximum of $210 million.
The deal would be facilitated by Aimbridge's first lien lenders, which will become the company's majority owners at closing and will provide the $100 million capital infusion. The agreement has the support of 80% of Aimbridge's first lien lenders, 100% of its second lien lenders and its existing sponsor, Advent International, which acquired majority ownership of the company in 2019.
Aimbridge Hospitality formed in 2003 and today manages more than 1,500 hotels in 50 states and 23 countries. The company acquired Interstate Hotels & Resorts in 2019 in a move solidifying its size and scale as largest third-party hotel management company in the world. Other recent acquisitions include the purchase of Grupo Hotelero Prisma in 2021, Prism Hotels & Resorts in 2021 and Terrapin Hospitality in 2023.
Aimbridge CEO Craig Smith said in the news release that for the past year, the company has been "making strategic and operational improvements to drive hotel performance."
"We have a clear strategy and execution plan in place — and with a strengthened balance sheet, we will be even better positioned to continue investing in our operational capabilities, winning new business in existing and new markets and strengthening our leading position in the industry."
Smith took the helm of Aimbridge in March 2024 after the departure of Mike Deitemeyer at the end of 2023. Since then, Smith has restructured the company's executive leadership organization, removing layers and putting a greater focus on hotel general managers and its hotel owner clients.
Smith remains in his role. The rest of Aimbridge's executive leadership team will stay the same with Steve Joyce serving as chairman of the board, Eric Jacobs as chief global growth officer and an independent board.
The process for the restructuring support agreement is currently underway, and the companies expect it will be compete in the first quarter of 2025.
"Throughout this process, Aimbridge will continue to operate its business as usual," the news release states. "Specifically, associates will continue to receive salaries and benefits in the normal course, and all vendors and suppliers will be paid in the ordinary course of business."