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New York CNN Business  — 

Extended Stay America, a bright spot for the beleaguered hotel industry, has been taken private in a $6 billion deal.

Blackstone and Starwood Capital announced Monday that the two companies will equally split the all-cash transaction and take 26-year-old company private. Extended Stay America has about 650 hotels across the United States, focusing on travelers that need week or longer stays.

The two firms are buying Extended Stay America (STAY) at $19.50 per share — a 23% premium over the chain’s average 30-day share price ending on March 12. Shares spiked 17% following the news.

Extended Stay America has 650 hotels across the United States.
Extended Stay America has 650 hotels across the United States.
Shutterstock

“Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions,” said Barry Sternlicht, CEO of Starwood Capital, in a press release. The deal is expected to close later this year.

Extended Stay America has small kitchens and affordable monthly rates, so it was attractive to traveling medical professionals and other essential workers over the past year.

Its full-year 2020 earnings were still dented by Covid-19, but not as much as its competitors because of its unique focus. Occupancy rate averaged 74% last year, which is much higher than the industry’s average occupancy rate of 44%.

STR, a hospitality analytics company, said that last year was the worst year on record for the US hotel industry. The industry isn’t expected to fully recover until 2023.