Hilton Worldwide Inc. filed for a $1.25 billion initial public offering on Thursday, after six-year stint as a privately owned business. The company did not disclose the precise amount of shares or the anticipated price range, nor did it reveal the ticker symbol it would use. However, the filing notes reveal that the money raised from the IPO will be used to pay off debt.
In 2007, Blackstone Group LP orchestrated one of the largest leveraged buyouts of its time in order to take Hilton private in a deal worth $26.7 billion. At first, the decision seemed like it might be a very regrettable one, as the financial crisis blossomed in full the very next year, destroying millions upon millions in home equity, and making consumers think at least twice about taking their next vacation.
However, the hotel industry has been steadily recovering over the course of the past few years, and Blackstone is hopeful that it will benefit.
The Dow Jones index for U.S. hotels has increased by 18% this year and the stock price for the Marriot (MAR) is up 15 percent, while Starwood (HOT) is up 20 percent.
During the last six years, Blackstone has turned things around for the Hilton brand and has been grooming the company to enter the public market. Revenue for 2012 increased 15 percent to $9.3 billion from 2010.
Reuters reports that Hilton is the biggest hotel chain by market value and that its adjusted earnings before interest, tax, depreciation and amortization increased 12 percent to $1.96 billion in 2012.
Hilton operates around 4000 hotels, resorts, and timeshare properties across the globe and is continuing to expand.
Since the takeover in 2007, Hilton increased the number of open rooms by 34 percent or 170,000 rooms. In addition, the company is responsible for 18 percent of global rooms under construction.