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DALLAS-La Quinta Corp., amassing a war chest in recent years, has struck a $395-million agreement to buy the limited service lodging division of Milwaukee-based Marcus Corp. This morning, execs will hold a conference call to discuss the 178-hotel transaction, totaling 16,837 rooms in 32 states.

La Quinta is purchasing real estate and franchise rights plus assuming the operation of the Marcus-owned properties and the Baymont franchise system. The buyout includes 86 Baymont Inns & Suites and one management pact, seven Woodfield Suites, one Budgetel brand, and Baymont’s 84-hotel franchise network with 7,074 rooms. Half of the assets are in the Midwest. La Quinta secured a $150-million financing commitment to close the deal.

In a press release, Francis W. Cash, La Quinta president, says the like cultures, in-place management strategies and similar survival techniques in recent years will aid in the transition. “The current management team has done a great job of investing in their hotels and employees throughout the difficult lodging environment of the last few years,” Cash says of the Baymont hierarchy. “As a result, Baymont is a strong brand positioned for growth. … La Quinta runs an 18% RevPAR premium to Baymont. We believe we can help Baymont grow its revenues.”

Cash and the La Quinta team are eyeing the prospects from beefing up the franchise network, which the Dallas-based hotel group put into play in 2001. La Quinta’s franchise system now has 100 hotels and plans to add at least 50 per year. The Baymont brand is positioned to add upward of 25 hotels per year, he says.

The financials of the play will make the Dallas-based La Quinta a $650-million, annual revenue generator with an employee base of about 9,000. The portfolio will rise to 550 hotels and more than 62,000 rooms.

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