With a large proportion of hotels around the world closed or severely impacted from the Covid-19 pandemic M&A activity is subdued.
There is still however activity, albeit ever more selective.
M&A timelines can vary enormously, when deals are struck executing them can become a protracted process. Only last week we reported on a $5.8 billion lawsuit over a stalled hotel acquisition. We did question if the delays were tactical, and they could turn out to be.
We can update readers on a recent hotel acquisition that has been executed and completed promptly.
Hotel M&A still active – all cash transactions
The acquisition was led by HVS Brokerage & Advisory, where in cooperation with Ten-X, it has closed on the auction and sale of the SureStay Hotel by Best Western.
The hotel was purchased by Cheema Investments, from I-70 Hotel Corporation in an all-cash transaction.
Hiral Bhakta, managing member of I-70 Hotel Corporation, commented on the transaction saying: “This hotel was distressed prior to the recent events affecting the hotel industry. A closed gas station and closed retail building were impacting the appearance and profitability of the hotel. We wanted a high degree of certainty that a sale would occur in the near term.
“Dustin (Dustin Robinett of HVS) assured us he would produce a buyer and close the deal, and he delivered. My family is very happy with the outcome, and we look forward to working with Dustin and HVS again in the future.”
Hotel M&A still active – location is key
The property is located near several manufacturing interests, a strong agricultural economy and related businesses, and the growing alternative energy sector of wind and solar
There were no delays or changes to the original agreement despite the uncertainty that arose in the hotel industry during that period. The buyer did not require financing and the deal was settled in cash.