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BUSINESS DESCRIPTION

Aimbridge Hospitality, LLC (“Aimbridge”) is a third-party hotel management services to owners of hotels. The company is an “asset-light” service provider, with limited to no ownership in the underlying hotel asset.

Background and Source

Lee Equity developed a thesis seeking asset-light real estate services, particularly service companies with recurring revenue and significant consolidation potential. Lee Equity became management's preferred choice given long-term relationships between the Aimbridge founders and Thomas H. Lee dating back to Mr. Lee’s prior investment in Wyndham International.

Investment Thesis Highlights

• Partnership with experienced management team 
• Fastest growing independent manager in the United States
• Highly fragmented industry with significant consolidation potential by industry leaders
• Secular tailwinds of hotel brands moving being toward asset-light franchisors and hotel owners moving from brand managers to independent managers

Post-Investment Value Creation

• Hired a Chief Investment Officer and added resources to the sales development, underwriting and finance teams
• Lee Equity created a strategic acquisition framework to prioritize acquisition targets based on chain scale mix, geographic focus, and brand mix
• Lee Equity optimized the capital structure and completed multiple recapitalizations to facilitate large portfolio additions and acquisitions
• Acquisitions: Closed five acquisitions prior to the majority sale in February 2019

Exit Summary

On February 1, 2019, Lee Equity Partners sold a controlling interest to a private equity firm, Advent International. In addition to the realized proceeds, the Fund has $30.0 million of rollover equity alongside the new owners, to participate in the future growth and continued M&A opportunities.