News for the Hospitality Executive
|PARIS, April 23, 2007 - Based on the strategic review undertaken
in 2006, Accor today announced the sale of Red Roof Inns to a
consortium comprised of Citi's Global Special Situations Group and Westbridge Hospitality Fund, L.P. for 1.32 billion dollars.
The Global Special Situations Group of Citigroup Global Markets Holdings Inc is a principal investment group that invests Citi's capital in
event-driven and special situation strategies globally.
Westbridge is a partnership between Westmont Hospitality Group and a number of Canadian pension fund managers, including Cadim Inc., a division of Caisse de depot et placement du Quebec, and Regime de rentes du Mouvement Desjardins. Westmont is one of the largest private owner/operator of hotels in the world.
The Red Roof Inn network will have 326 properties (221 Owned, 105 Franchised) and 35,238 rooms (after rebranding of 9 Red Roof Inns as Motel 6 units prior to the sale), located mainly in the East coast and Midwest regions of the United States.
The transaction will be based on 11.2 times 2006 EBITDAR (which totaled 118 million dollars excluding the rebranded Motel 6 units). Financially, the transaction will enable Accor to reduce its adjusted net debt by 830 million euros (1.08 billion dollars), of which 470 million euros (610 million dollars) will be added to the Group's cash reserves.
Following the divestment, Accor is refocusing on a single brand, Motel 6, the leading economy hotel chain in the United States. Motel 6 operates 928 hotels across North America, especially on the US West Coast, where it is market leader in California with 181 units. The chain enjoys very high brand recognition and a unique positioning, established more than 30 years ago, as offering "the best price of any national chain".
Refocusing on the Motel 6 brand will enable the US Economy Hotel business to generate ROCE of more than 10% in 2007.
Regarding this operation, Gilles Pelisson, CEO, says : "The United States are a key market for us. With the ambition of being the world leader in economy and budget hotels, Accor plans to step up development of Motel 6 by opening more than 200 units in the United States and Canada by 2010."
Accor's financial advisor on the transaction was Bank of America.
Accor, the European leader in hotels and tourism, and a global leader in corporate services, operates in nearly 100 countries with 170,000
|Also See:||Hilton Hotels Corporation Sells Five Canadian Hilton Properties to Westmont Hospitality Group for Approximately CAD $243 million / September 2006|
|Affiliate of Westmont Hospitality Group Acquiring Boykin Lodging Company for Approximately $416 million / May 2006|
|Accor North America Strategy to Redefine the Red Roof Inn Brand Includes New Logo for Renovated Properties / July 2004|
|Creating a Distinction Between Red Roof and Motel 6 a Challenge for Accor; Red Roof Spending $204 million Renovating 200 Older Properties / Dec 2002|
Home | Welcome|
News | Classifieds|
Viewpoint Forum | Ideas&Trends
Please contact Hotel.Onlinewith your comments and suggestions.