NEWTON, Mass.--Hospitality Properties Trust (NYSE: HPT) today
announced that it has acquired 40 hospitality and fuel centers from
Petro Stopping Centers, LP ("Petro") for $630 million plus closing
costs. Simultaneously with this acquisition, these sites were leased to
TravelCenters of America, LLC (AMEX: TA) for an initial net rent of
approximately $62.2 million/year.
Prior to this acquisition, Petro Stopping Centers Holdings, LP was a
privately owned company headquartered in El Paso, TX, which was majority
owned by a Texas family and minority owned by affiliates of Exxon Mobil
(NYSE: XOM) and AB Volvo of Sweden (American Depository Receipts,
NASDAQ: VOLV). Some of Petro's debt securities are registered with the
Securities and Exchange Commission and additional information about
Petro may be obtained from its public filings at the SEC.
The 40 centers acquired by HPT are similar to, but generally newer
and larger than, the travel centers which HPT acquired earlier this
year. The 40 Petro centers are located in 25 states and are all in close
proximity to major U.S. Interstate Highways. These 40 centers are
further described on Schedule A to this press release.
Simultaneously with HPT's acquisition of the 40 centers, TA acquired
substantially all of the operating assets of Petro, including inventory,
working capital and certain personal property at the centers leased
from HPT, as well as additional travel centers.
In addition to its purchase price of approximately $630 million, HPT
has agreed to pay certain costs of this transaction, principally the
costs associated with defeasance and prepayment of debt secured by the
Petro properties plus customary closing costs. HPT estimates that these
costs may be approximately $25 million.
HPT's lease of the 40 centers to TA has many features similar to
other HPT transactions. It is one lease for all 40 centers. It is a long
term lease through June 30, 2024 (17 years), plus renewal options
thereafter which may only be exercised for all, and not less than all,
of the centers combined. Starting after 2012, HPT's rent will increase
annually based upon percentages of increased gross revenues at the
leased centers.
John G. Murray, President of HPT made the following statement when this transaction was announced:
"When HPT agreed to purchase TravelCenters of America and to create
TA as a separate public company in September 2006, HPT said that it
expected it would find financially accretive growth opportunities in the
travel center industry. We are delighted to work with TA to help it
expand its business, especially because we have been able to acquire
such high quality properties as those which have been built and
assembled by Petro."
HPT has funded this transaction using cash on hand and drawings under its unsecured revolving credit facility.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
OTHER FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON HPT'S PRESENT INTENT, BELIEFS AND EXPECTATIONS, BUT THEY ARE
NOT GUARANTEED TO OCCUR AND THEY MAY NOT OCCUR FOR NUMEROUS REASONS. FOR
EXAMPLE:
-
THIS PRESS RELEASE STATES THAT HPT EXPECTS TO PAY ABOUT $25
MILLION FOR DEBT DEFEASANCE OR PREPAYMENT AND OTHER COSTS. HPT'S COSTS
TO PREPAY THE EXISTING PETRO DEBT MAY DEPEND UPON MARKET CONDITIONS AT
THE TIME THE DEBT IS PREPAID; AS MARKET INTEREST RATES CHANGE THESE
COSTS MAY INCREASE.
-
MR. MURRAY'S COMMENTS CONCERNING THIS TRANSACTION IMPLY THAT IT
WILL BE FINANCIALLY ACCRETIVE TO HPT. THE AMOUNT OF FINANCIAL ACCRETION
WHICH HPT MAY REALIZE FROM THIS TRANSACTION WILL DEPEND IN LARGE PART
UPON THE COSTS OF THE CAPITAL WHICH HPT USES TO FUND THIS TRANSACTION.
HPT HAS INITIALLY FUNDED THIS TRANSACTION USING CASH ON HAND AND
DRAWINGS UNDER ITS FLOATING RATE, UNSECURED REVOLVING CREDIT FACILITY.
LONGER TERM, HPT'S FUTURE CAPITAL COSTS ARE NOT KNOWABLE AT THIS TIME.
INVESTORS ARE URGED TO REVIEW THE SECTION ENTITLED "RISK FACTORS" IN
HPT'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2006,
AS FILED WITH THE SEC, ESPECIALLY THE RISK FACTORS WHICH RELATE TO HPT'S
INVESTMENT IN PROPERTIES LEASED TO TA, FOR OTHER REASONS WHY FORWARD
LOOKING STATEMENTS IN THIS PRESS RELEASE MAY NOT OCCUR OR WHY AN
INCREASE IN HPT'S INVESTMENTS IN TRAVEL CENTERS LEASED TO TA MAY NOT BE
PROFITABLE FOR HPT.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
SCHEDULE A
Petro Centers Acquired By Hospitality Properties Trust
-- 40 hospitality and fuel centers;
-- Located in 25 states (no. of centers in each state):
Alabama (1) Nevada (2)
Arkansas (2) New Jersey (1)
Arizona (2) New Mexico (1)
California (1) New York (1)
Florida (1) North Carolina (1)
Georgia (2) Ohio (4)
Indiana (1) Oklahoma (1)
Illinois (1) Oregon (1)
Kentucky (1) Pennsylvania (1)
Louisiana (3) Tennessee (2)
Missouri (1) Texas (6)
Nebraska (1) Washington (1)
Wyoming (1)
Total Average/Center
-- Land area: 1,036 acres 26 acres
-- Full service restaurants: 7,440 seats 196 seats
(38 centers)
-- Truck parking spaces: 10,226 spaces 256 spaces
(all 40 centers)
-- Car parking spaces: 5,532 spaces 142 spaces
(39 centers)
-- Diesel dispensers: 461 dispensers 12 dispensers
(all 40 centers)
-- Gasoline dispensers: 201 dispensers 5 dispensers
(38 centers)
-- Truck repair shops: 190 bays 5 bays
(38 centers)
In addition there are 16 quick serve restaurants operated under
nationally known franchises such as Pizza Hut, Subway, etc. at 13 of the
locations. All of the centers offer retail travel and convenience
stores, movie theatre type facilities for professional drivers,
electronic game rooms, private shower facilities (591 total shower
stalls or about 15 per center) and other entertainment and recreational
facilities, including casino gambling in locations where it is legally
permitted.
Hospitality Properties Trust
Timothy A. Bonang
617-796-8149
Manager of Investor Relations
www.hptreit.com