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«Global alternative asset manager The Carlyle Group today announces the close of the acquisition of the B&B Hotel Group, which operates a chain of 223 budget hotels with a total of 16,162 rooms across France, Germany and Italy, from European investment firm Eurazeo for an enterprise value of circa €480 million. Further financial terms were not disclosed. The transaction closed on 28th September 2010.
Launched in Brittany, France in 1990, B&B is at the “high end” of the budget hotel segment, serving business and leisure travellers. Carlyle intends to expand the company by investing in the continued renovation of current hotels and by accelerating the hotel opening pace across Europe. This will include further penetration of the core French market, significant expansion in Germany (which currently accounts for only 34 properties in the total portfolio) and growth in Italy, as well expanding the chain into new territories such as Poland, Portugal and The Netherlands.
Franck Falezan, Managing Director at The Carlyle Group, commented: “B&B has high customer satisfaction and has had strong market performances and strong business resilience during the downturn. We are confident in the continued high growth potential of the company in existing and new European markets. In partnership with our experienced real estate team and B&B’s excellent management team, we look forward to helping B&B reach its full potential.”
Eric Sasson, Managing Director, Real Estate at The Carlyle Group, added: “Our ability to offer B&B’s management team a single partner with two sets of complementary and relevant skills, as well as offices and expertise throughout Europe, was central to setting Carlyle apart from other suitors. Together with our European buyout colleagues, we look forward to helping grow B&B into the top pan-European operator of budget hotels.”
George Sampeur, Chief Executive Officer of B&B Hotels, said: “We are exceptionally proud of B&B’s achievements over the past 20 years and believe Carlyle’s institutional support will facilitate our plans for expansion and further enhance the service we provide. Our success underscores the appeal of our concept, and we believe this is why we have a 98% customer satisfaction rate. We look forward to working with Carlyle’s unique combination of the relevant skill sets and specific expertise of individual real estate and leisure teams.”
Equity for this transaction comes from Carlyle Europe Partners III, a €5.4 billion buyout fund, and Carlyle Europe Real Estate Partners III, a €2.2 billion real estate fund. This is the thirdinvestment in six months for CEP following Gianonni (manufacturer of stainless steel heat exchangers) and NBTY* (manufacturer of vitamins and nutritional supplements). The transaction also follows the real estate team’s recent acquisition of the £671 million White Tower portfolio and investment this week in the London student housing market.
*Transaction not yet closed
Further information
The European Budget Hotels market
Over the past 10 year the budget hotels sector has proven to be a highly resilient asset class, having increased Average Daily Rate (ADR) by at least 4%, every year since 1999 and grown Revenue Per Available Room (RevPAR) by 2.9% p.a. over the same period, against 0.5% for the hotel industry as a whole.
B&B Hotel Group
B&B was launched in Brittany, France in 1990 and is positioned at the “high end” of the budget hotel segment. Its innovative concept lies in offering high quality at a competitive price, to meet the needs of both business and leisure travellers. B&B operates 223 hotels in France, Germany and Italy, with a total of 16,162 rooms. Since the Group’s creation, quality has always been important in the development of hotels: choice of construction materials, equipment, furniture, policy of offering a real bathroom, sufficiently spacious family suites, generous all-you-can-eat breakfast buffets, access to latest technologies including free and unlimited WiFi access.
With almost 13,200 rooms and 183 hotels in France, B&B Hotels is the third-largest budget hotel group in the country after Accor and Louvre Hôtels. In Germany, it is the second-largest budget hotel chain with 35 hotels.
The Carlyle Group
The Carlyle Group is a global alternative asset manager with $90.6 billion of assets under management committed to 66 funds as of June 30, 2010. Carlyle invests across three asset classes - private equity, real estate and credit alternatives - in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $61.2 billion of equity in 983 transactions. The Carlyle Group employs more than 880 people in 19 countries. In the aggregate, Carlyle portfolio companies have more than $84 billion in revenue and employ more than 398,000 people around the world. www.carlyle.com». ( CS della Società)
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