Private equity firm Blackstone Group has agreed to acquire lodging chain Extended Stay America for $1.99 billion. With the purchase, Blackstone will assume $1.13 billion worth of Extended Stay America’s debt.

Extended Stay, which chiefly serves corporate employees on long-term assignments, has 475 hotels in 42 states. Rates at an Extended Stay lodge ranged from $200 to $338 per week last year. The company’s occupancy rate has suffered in recent years, dropping to 65% in 2003 from 80% in 2000. The firm also experienced a 29% decline in net income between 2002 and 2003.

Blackstone agreed to pay $19.62 per share for the lodging chain, which represented a 24% premium on its Friday close of $15.81 on the New York Stock Exchange.

"This transaction will benefit from our long track record and existing expertise in the hotel sector," said Stephen Schwarzman, Blackstone’s president and CEO, in a statement.