The folks at Apollo Management have been loading up on real estate lately. One deal that closed last week was the buyout of Realogy, which has an assortment of residential real estate brokerages such as Century 21, Coldwell Banker, and ERA.Another part of Apollo -- Apollo Investment Corporation (NASDAQ: AINV) -- is also making a play at real estate. Today, the firm agreed to pay $17.75 for Innkeepers USA Trust (NYSE: KPA). The valuation comes to roughly $1.5 billion.
Innkeepers is a REIT and operates a variety of hotel brands, like Residence Inns, Summerfield Suites and Hampton Inns. While the firm generates consistent cash flows, the deal is not cheap at its 14X EBITDA multiple. Then again, the company probably has expansion possibilities.
On today's announcement, Innkeepers' stock is trading up 8% to $17.77.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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