AccorHotels has signed a letter of intent to acquire a 50 per cent stake in sbe Entertainment Group in a US$319 million deal, further demonstrating its ambitions in the luxury lifestyle hospitality segment.
AccorHotels will acquire 50 per cent of sbe’s common equity held in part by Cain International for US$125 million, while sbe’s founder and CEO Sam Nazarian will continue to own the remaining 50 per cent.
In addition, AccorHotels will invest US$194 million in a new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain International.
The investment will allow sbe to leverage AccorHotels’ global hospitality platform while remaining an independent luxury lifestyle operator. Sbe will continue to be led by Nazarian as well as its management team while retaining its global headquarters in New York.
Nazarian said: “This long-term investment by AccorHotels provides sbe, its customers and hotel owners with greater depth and breadth around the world.”
With the acquisition, sbe hotels will be available on the AccorHotels distribution platform, be featured on Accorhotels.com and be part of the AccorHotels loyalty programme.
“Building on our acquisition of Morgans Hotel Group in 2016, this investment will further accelerate our growth both domestically in the US and in new markets internationally, particularly in Europe,” Nazarian continued.
Sébastien Bazin, chairman & CEO, AccorHotels, said the deal “marks a new step in expanding AccorHotels’ footprint in this fast-growing segment in key US cities such as Miami, Los Angeles or Las Vegas, and in other international destinations”.
Sbe’s hospitality and residential brands include SLS, Delano, Mondrian, Hyde, The Originals (Sanderson, St. Martin Lane, Hudson, 10 Karakoy, Shore Club) and the Redbury Hotels. Through its Disruptive Restaurant Group platform, sbe has created culinary brands Katsuya, Umami Burger, Cleo, Leynia, Diez & Siez and Filia and innovative entertainment brands including Hyde nightclub and dayclub, Nightingale, Privilege dayclub Black Orchid, S Bar, Skybar and the Doheny Room.
Landmark destinations in its portfolio include, Delano South Beach in Miami, SLS Baha Mar in the Bahamas, Mondrian Doha in Qatar, Hyde Bellagio in Las Vegas, Mondrian Park Avenue in New York City and the newly-opened 57 story SLS LUX Brickell in Miami. Upcoming opening includes Delano Rio de Janeiro, Delano Dubai at the Palm and Hyde Midtown in Miami.
Sbe’s pipeline includes projects in global gateway cities such as Atlanta, Chicago, Washington DC, Dubai, Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos.
By the end of 2018 sbe will operate 25 hotels, comprising 7,498 keys with a majority in North America, 170 restaurants and entertainment venues in global destinations as well as new properties in the Middle East, Asia and Latin America. It currently has a further 20 hotels and residences around the world in its pipeline, as well as 59 standalone restaurants and nightlife venues.
The transaction is expected to be completed by July 31, 2018.