Shareholders seem to have given Extended Stay America a warm, but not luxurious, welcome to the public markets.
The hotel operator priced its initial public offering on Tuesday at $20 a share, in the middle of its expected range. At that price, the company will have raised $565 million and will be valued at $4 billion.
Extended Stay has become the latest company owned by investment firms to go public, as financiers seek to take advantage of soaring valuations in the equity markets to cash out their holdings.
The hotelier is owned by Centerbridge Partners, Paulson & Company and?the Blackstone Group.
The offering consists of common stock in Extended Stay America and Class B shares of ESH Hospitality, a real estate investment trust. The two types of shares will be connected and trade together. Shares will begin trading Wednesday on the New York Stock Exchange.
Founded in 1995, Extended Stay has grown into a giant in the North American hotel business, with 682 hotel properties in the United States and Canada under its flagship brand, Crossland Economy Studios and Hometown Inn.
The company has switched owners several times, even surviving a trip into bankruptcy protection before falling under the ownership of Centerbridge, Paulson and Blackstone, the last of which had previously owned the hotelier.
Extended Stay?s I.P.O. was run by?Deutsche Bank,?Goldman Sachs?and?JPMorgan Chase.