9/12/2013 | By Allen Kenney
Hilton Worldwide Holdings Inc. on Sept. 12 filed with the Securities and Exchange Commission (SEC) to hold an initial public offering (IPO) intended to raise at least $1.25 billion.
Hilton, one of the most historic brands in the hotel industry, was taken private prior to the financial crisis in 2007 by the private equity investment firm Blackstone Group. Blackstone paid $26 billion at the time for the lodging company and its portfolio brands, which include Hilton Hotels & Resorts, Embassy Suites, Waldorf Astoria, Homewood Suites and DoubleTree.
Hilton’s S-1 registration filing with the SEC did not include information regarding the number of shares that would be put to market or share prices. The filing did indicate that Hilton would operate as a controlled company following the stock offering, with Blackstone and its affiliates owning a majority of the voting power of shares eligible to vote in the election of Hilton’s board of directors.
Hilton has seen significant gains in net operating income (NOI) in the last two years. NOI climbed from $553 million in 2010 to $975 million in 2011, an increase of more than 75 percent. Hilton reported NOI of $1.1 billion in 2012, up 13 percent from the prior year. The firm’s revenue per available room (RevPAR) has climbed steadily during that period, up 5 percent from 2010 to 2011 and 3 percent from 2011 to 2012.
Based in McLean, Va., Hilton’s property portfolio includes more than 4,000 hotels, resorts and timeshare sites in 90 countries around the world. Those properties account for nearly 700,000 rooms in total. Since the Blackstone deal in 2007, Hilton has grown the total number of rooms in its hotel portfolio by more than 30 percent. The company is now the largest provider of hotel rooms in the world, according to data from Smith Travel Research, Inc.
Investment banks Deutsche Bank Securities Inc., Goldman, Sachs & Co., BofA Merrill Lynch, and Morgan Stanley & Co. LLC are underwriting the offering.