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AccorHotels has announced it has entered into exclusive negotiations to acquire a 50% stake in SBE Entertainment Group, continuing a strategy of expanding its offering in the luxury lifestyle hospitality segment.
Founded in 2002 by Sam Nazarian, SBE is a leading lifestyle hospitality company that develops, manages and operates global properties and brands including Hyde and Redbury Hotels.
The deal will see AccorHotels acquire the 50% of SBE’s common equity held in part by Cain International for $125m (£95m). Nazarian will continue to own the remaining 50% of SBE.
In addition, AccorHotels will invest $194m (£147m) in a new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain International. AccorHotels’ total investment in SBE will be $319m (£242m).
This long-term investment will allow SBE to leverage AccorHotels’ leading 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 partnership with AccorHotels marks a new milestone in SBE’s history. This long-term investment by AccorHotels provides SBE, its customers and hotel owners with greater depth and breadth around the world and supports our collective ambition to be the best lifestyle hospitality company in the market.
“Building on our acquisition of Morgans Hotel Group in 2016, this investment will further accelerate our growth both domestically in the United States and in new markets internationally, particularly in Europe.”
Sébastien Bazin, CEO of AccorHotels, added: “I am delighted to announce this strategic partnership with one of the most innovative Groups in the luxury lifestyle space worldwide. It 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.
“‘The new luxury’ is all about exclusive experiences and incredible lifestyle concepts and sbe brands have the perfect know-how that will complete perfectly the AccorHotels portfolio. We remain committed to providing all our guests with unparalleled service and always renewed experiences around the world.”
By the end of 2018 SBE will operate 25 hotels, comprising 7,498 rooms with a majority in North America. It currently has a further 20 hotels and residences around the world in its pipeline
The transaction is subject to regulatory approvals and is expected to be completed by July 31, 2018.
