Service Properties Trust - Shares Of Beneficial Interest · NASDAQ:SVC
Service Properties Trust - Shares Of Beneficial Interest — Hospitality Properties Trust — Merger or Acquisition (September 2006)
21 slides from Service Properties Trust - Shares Of Beneficial Interest's merger presentation, Sep 19, 2006
Slide 1: Presentation Regarding HPT's Agreement to Acquire TravelCenters of America
Presentation Regarding HPT’s Agreement to Acquire TravelCenters of America September 19, 2006 Hospitality Properties Trust NYSE: HPT
Slide 2: Warning Regarding Forward Looking Statements
WARNING REGARDING FORWARD LOOKING STATEMENTS THIS PRESENTATION CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, HPT’S EXPECTATION THAT THE TA TRANS
Slide 3: Table of contents
Page Transaction Summary . . . . . . . . . . . . . . . . . . . . . 3 TA’s Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Benefits to HPT . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Table of contents.
Slide 4: Transaction Summary
TRANSACTION SUMMARY
Slide 5: Transaction Summary: acquisition, financing and timing
TRANSACTION SUMMARY: acquisition, financing and timing. HPT has agreed to acquire TravelCenters of America (“TA”) for approximately $1.9 billion ($1.8 billion after deduction for purchased working capital). Simultaneously with this acquisition, HPT will spin out TA’s operating business (“New TA”) wh
Slide 6: Transaction Summary: TA's business
TRANSACTION SUMMARY: TA’s business. TA is one of the largest operators of travel centers in North America: 162 sites in 40 states and Ontario, Canada. TA owns largely irreplaceable real estate at interstate highway exits. A typical site has over 20 acres, over 20,000 sq. ft. of store/restaurants and
Slide 7: Transaction Summary: benefits to HPT
TRANSACTION SUMMARY: benefits to HPT. Depending upon final lease and financing terms, the TA transaction is expected to increase HPT’s FFO per share between $0.10 and $0.15 per share in the first year. TA operates in a fragmented industry which may provide future growth opportunities for HPT. The TA
Slide 8: TA's Business
TA’s BUSINESS
Slide 9: TA provides an important infrastructure service within the North American transportation system
TA provides an important infrastructure service within the North American transportation system. TA operates the largest and only nationwide full service travel center network with 162 travel centers in 40 states and Ontario, Canada. TA has a superior network of largely irreplaceable sites along the
Slide 10: TA operates a unique, largely irreplaceable network of sites along the Interstate Highway System
TA operates a unique, largely irreplaceable network of sites along the U.S. Interstate Highway System. TA Locations New locations under development
Slide 11: TA is a leading supplier to long haul trucking fleets and their drivers
TA is a leading supplier to long haul trucking fleets and their drivers, as well as to independent truck drivers. TA is a principal supplier to the top 100 largest long haul trucking fleets. One of three daily stops of a truck driver is for fuel, all three involve non-fuel purchases. Laws and contra
Slide 12: TA has the broadest offering of non-fuel products and services
TA has the broadest offering of non-fuel products and services. All but eight TA travel centers have a proprietary branded full service restaurant. 110 TA travel centers have at least one branded QSR (205 QSRs in total). From 2000 to 2005, same site QSR revenue grew at a CAGR of 11.2%. Twenty (20) c
Slide 13: TA has an established record of dealing with environmental risks
TA has an established record of effectively dealing with environmental risks. Phase I and II environmental assessments have been completed for 168 sites (includes some sold sites). A professional evaluation in 2006 calculates net required cost of clean up activities at about $11 million (undiscounte
Slide 14: TA has a management team with broad industry experience
TA has a management team with broad industry experience which will be supplemented by HPT/RMR personnel with strong financial expertise. TA has substantial industry experience throughout the company. Senior managers average 24 years industry experience. Regional VPs have an average of 30 years indus
Slide 15: Benefits to HPT
BENEFITS TO HPT
Slide 16: The TA transaction will create material benefits to HPT
The TA transaction will create material benefits to HPT. Simultaneously with the purchase of TA, HPT will lease substantially all of TA’s real estate to a subsidiary, New TA, and approximately 90% of New TA’s shares will be distributed to HPT shareholders. TA operates in a fragmented industry which
Slide 17: HPT will retain TA's real estate and lease it to New TA
HPT will retain TA’s real estate and lease it to a well capitalized tenant, New TA. HPT will retain substantially all of TA’s real estate and transfer all of TA’s operations to a subsidiary, New TA, which will be distributed to HPT shareholders. 13 TA sites are owned and operated by TA franchisees;
Slide 18: The TA transaction may provide HPT with future growth opportunities
The TA transaction and the strategic relationship with New TA may provide HPT with future growth opportunities. There are approximately 3,000 truck stops in the U.S. About 500 are full service travel centers. Current industry sales are estimated at about $55 billion. TA represents just under 10%. Th
Slide 19: The TA transaction will provide revenues not tied to the hotel industry cycle
The TA transaction will provide HPT with significant revenues which are not tied to the hotel industry cycle. Trucking is, and is likely to remain, the dominant mode of freight transportation in the U.S. There are three principal reasons why servicing the trucking industry has enjoyed consistent yea
Slide 20: HPT will remain principally invested in the hotel subsector
* Excludes one newly built Staybridge hotel acquired during April 2006. HPT will remain principally invested in the hotel subsector of the hospitality industry (approximately 2/3 rd of investments). HPT’s hotels have consistently outperformed industry averages. Lease/Manager/Brand No. of Hotels Occu
Slide 21: [LOGO]
[LOGO]
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