Starwood Capital Group, a leading private investment firm, and Principal Hayley Group, the leading business, conference & events hotel group, has announced that an investment fund affiliated with Starwood has acquired Principal Hayley. Terms of the transaction were not disclosed but the price is thought to be in the region of £360 million. If so, it would represent up to ten times earnings before interest, tax, depreciation and amortisation. Main lender to Principal Hayley is Lloyds Banking Group.
This transaction could be the first of a number of debt burdened hotel groups, with De Vere Venues and Malmaison Group leading candidates.
Principal Hayley
Principal Hayley is a collection of 23 landmark city centre hotels and dedicated conference and training venues across the UK and Europe. The Principal Hayley portfolio currently includes 23 properties offering a combined capacity of approximately 4,000 bedrooms, over 500 meeting rooms and ability to host over 26,000 delegates per day in key locations. The group includes well known iconic city centre hotels such as The George, Edinburgh, the St David’s Hotel, Cardiff, the Grand Central Hotel, Glasgow and the Hotel Russell, London.
Starwood’s continuing expansion in hotels
The transaction continues Starwood Capital Group’s expansion in the hotel sector, particularly in Europe. The Greenwich, Connecticut-based firm currently owns, among other assets, the Louvre Hotel Group, which includes over 1,100 hotels located in 39 countries, in addition to interests in many of the Meridien Hotels including the Etoile in Paris and the Eden in Rome, as well as the luxury Baccarat Hotel & Resorts brand and the lifestyle eco-brand, 1 Hotels & Resorts which recently announced their first five projects.
Barry Sternlicht, Chairman and CEO of Starwood Capital Group, said:
“This transaction marks an exciting investment in the European hotels and conferences sector and provides a great management platform for us to expand further in Europe. Principal Hayley’s assets include historic and iconic properties strategically located in many key city centre locations.”
Fair exit for stakeholders
Roger Devlin, Chairman of Principal Hayley, said:
“I believe it is a significant achievement in challenging market conditions to have delivered a fair exit multiple for stakeholders within a disciplined timeframe. This is the right deal for customers and employees alike.”
About Starwood Capital Group
Starwood Capital Group is a private, U.S.-based investment firm with a core focus on global real estate. Since the group’s inception in 1991, the firm has raised over $16 billion of equity capital and, through its various funds, has invested $13.7 billion representing $36 billion in assets. Starwood Capital Group currently has over $22 billion of assets under management.