AccorHotels and sbe Entertainment Group (sbe), a luxury lifestyle hospitality company, have signed a letter of intent for the French hotel company to acquire a 50% stake in sbe. This news comes just few weeks after Accor revealed its acquisition of catering management company Adoria.
AccorHotels will acquire the 50% of sbe's common equity held in part by Cain International for US $125 million. Sam Nazarian, founder and CEO of sbe, will continue to own the remaining 50%.
Founded in 2012, sbe is a lifestyle hospitality company that develops, manages and operates hotel properties, residences, serviced apartments and brands around the world including SLS, Delano (which includes the Delano Dubai at the Palm), Mondrian, Hyde, The Originals and the Redbury Hotels.
Accor 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 total investment in sbe will be US $319 million, a statement from the company confirmed.
The “long-term” investment will allow sbe to use Accor’s global hospitality platform while it will still remain an independent luxury lifestyle operator. Sbe will also retain its headquarter in New York and Nazarian will continue to lead the company as well as its management team.
Commenting on the partnership, 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.”
AccorHotels chairman and CEO, Sebastien Bazin said: “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.”
The transaction is subject to regulatory approvals. It should be completed by July 31, 2018, the statement said.