NEW YORK— At the top of the first quarter of 2003, Toronto-based AFM Hospitality Corp. was one for two in its quest to close on two regional management company acquisitions it had lined up last year to fold into its lodging enterprise, part of its aggressive game plan for growth in the U.S. It struck out with privately-held Marshall Management, which pulled out of a planned merger with the publicly traded AFM. The move came after owners of properties managed by Marshall indicated a strong preference to keep the status quo with the Salisbury, MD-based midscale operator instead of being melded into the larger portfolio of the Canadian concern. If consummated, the deal would have given AFM 22 management contracts representing some 3,000 rooms. On the flip side, AFM scored by completing the acquisition of San Diego-based Trigild Services Inc., a five-tier, privately-held company that provides receivership and turnaround management solutions for nationally franchised brands, including hotels, restaurants and commercial properties. Also in the mix are technology and staffing services divisions. The acquired businesses will continue under their existing brand names as Trigild International, now a subsidiary of AFM, will operate as the Interim Asset Management division of AFM Hospitality. AFM retained William Hoffman, one of Trigild’s founders, as president of Trigild International. Judy Hoffman will continue as senior vp, marketing, with other Trigild staff expected to remain in place. With annual revenue in excess of $50 million and a customer base weighted with financial institutions, the 27-year-old Trigild brought 52 contracts to the deal, approximately 10 of them for hotels, including brands such as Hyatt, Holiday Inn and Ramada. Non-lodging brands include Applebee’s, Denny’s, Burger King and KFC restaurants; and Texaco, Chevron and Exxon service stations and truck stops. As previously reported in HOTEL BUSINESS®, AFM, now with more than 200 North American properties, and Marshall, currently with 20 three- and four-star hotels, had signed a letter of intent in 2002 for AFM to acquire the company headed by Chairman/CEO Charles “Chuck” Marshall and his son, Mike Marshall, who serves as president. The move would have reprised AFM’s earlier actions of acquiring and folding in regional management company Heyde Hospitality Inc. of Chippewa Falls, WI, in an aggressive move to create a higher profile in the U.S. marketplace. It had been anticipated by AFM Hospitality executives Lawrence Horwitz, chairman/CEO and Stephen Phillips, vice chairman/managing director of AFM’s business development unit, that the Marshalls would have played a major role in the company after the merger. The AFM executives had planned to position Chuck Marshall as president/CEO of U.S. management operations nationwide under AFM Hospitality Management Corp. The younger Marshall would have been in charge of Marshall Management and East Coast operations. The pullback from the merger was not the first for Marshall, which over the past decade has come close to several fold-in deals with companies of equal or larger size, according to Mike Marshall. In those scenarios, said Marshall, “My father wasn’t ready. They wanted to come in and basically made promises in the letter-of-intent phase, then when it got down to doing the contract, none of those promises came through.” This time around it was the owners’ voices of Marshall-managed properties that turned the executives from the deal. Unavailable for comment, Chuck Marshall, in a prepared statement said, “After the merger was announced, we sat down with our owners to discuss the merger details. But the more we talked to our owners, the clearer it became that there continues to be significant demand for mid-sized management companies [that]can provide a high level of personal attention to each property. We learned that while there is a need for larger organizations like AFM Hospitality, there is an equal
