WestCap Investments Corp. agrees to purchase Maryland Hotel as its qualifying transaction

MISSISSAUGA, ON, April 10, 2014 /CNW/ - WestCap Investments Corp. ("WI" or the "Company") (TSX VENTURE: WI.P), a capital pool company, is pleased to announce that it has entered into a purchase and sale agreement dated April 10, 2014 to acquire the Red Roof Inn located at 827 Elkridge Landing Road, Linthicum Heights, Anne Arundel County, Maryland 21090 (the "Property"), as its "Qualifying Transaction" (as that term is defined in TSX Venture Exchange ("TSXV") Policy 2.4 – Capital Pool Companies).

The Property is a 3 storey, 132 room limited service hotel built in 1986 and renovated in 2013.  The Property is located close to major regional roadways including interstates 95, 295 and 695 and is approximately 1.5 miles northwest of the Baltimore Washington Thurgood Marshall Airport.  The purchase price for the Property is US$8,500,000 (the "Purchase Price"), excluding closing costs and adjustments and brand mandated property improvement plan.  WI intends to satisfy the Purchase Price through a combination of cash and the issuance of Class B units of a subsidiary US LP.  WI has paid a refundable deposit in the amount of US$20,000, which will become non-refundable upon satisfaction or waiver of WI's due diligence condition in respect of the acquisition.

The following table highlights additional information about the Property:

Year

Built

Year

Renovated

Rooms

NOI

(LTM)

Cap rate

(NOI)

Occupancy

(LTM)

ADR

(LTM)

RevPAR

(LTM)

1986

2013

132

$762,608

9.0%

73.5%

$62.0

$45.6



Notes:

NOI = net operating income. See also "Non-IFRS Measure"


LTM = last 12 months ended December 31, 2013


ADR = average daily rate per room


RevPAR = revenue per available room

The sellers of the Property are R-Roof Assets, LLC and RRI BWI, LLC (collectively, the "Sellers"), two Delaware limited liability companies.  The Sellers do not act at arm's length to WI and as such, the acquisition will be a Non-Arm's Length Qualifying Transaction (as that term is defined in TSX Policy 2.4).

The acquisition of the Property will form part of a series of transactions relating to the conversion (the "REIT Conversion") of WI into a real estate investment trust ("REIT").  The acquisition of the Property and the REIT Conversion will be subject to receipt of all necessary approvals, including those of the WI shareholders, the brand owner, the Ontario Superior Court of Justice (Commercial List) and the TSXV, and certain other closing conditions including completion of satisfactory due diligence and successful financing, if determined necessary by WI.

Upon completion of the acquisition of the Property and the REIT Conversion, the directors and officers of WI will become the trustees and officers of the REIT.

Cautions Regarding Future Plans

Completion of the proposed transaction is subject to a number of conditions, including but not limited to TSXV acceptance and if applicable pursuant to TSXV requirements majority of the minority approval.  Where applicable, the transaction cannot close until the required shareholder approval is obtained.  There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the proposed transaction may not be accurate or complete and should not be relied upon.  Trading in the securities of WI should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.  Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release. Additional information regarding the proposed transaction will be provided in a future press release.

Non-IFRS Measure

This press release uses the term "NOI", which stands for net operating income.  NOI is not a measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS.  It is a supplemental measure of performance for issuers.  WI believes that NOI is an important measure of operating performance and is useful in assessing the company's property operating performance on an unlevered basis.  The IFRS measurement most directly comparable to NOI is net income and NOI should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the company's performance.

SOURCE WestCap Investments Corp.

For further information: Mr. Irfan Lakha, Chief Financial Officer and Secretary of WestCap Investments Corp. at (905) 629-3400.