Hotels in the UK, Ireland and Spain, for £675 million
|18th Aug 2006 - Travelodge, the UK's fastest growing hotel company
has today been acquired by Dubai International Capital ("DIC"), a private
equity firm, for a consideration of £675 million from the Permira
Funds. The acquisition is unconditional and is expected to complete by
Following completion of the transaction, Keith Hamill (Chairman), Grant Hearn (Chief Executive), Guy Parsons (Chief Operating Officer) and Jon Mortimore (Finance Director) will stay with the business and continue to manage Travelodge under DIC's ownership.
Travelodge operates 291 hotels, with 279 in the UK, nine in Ireland and three in Spain. The budget chain's aggressive UK growth strategy is on track to deliver a total of 32,000 UK rooms in the next five years. Travelodge aims to be the biggest budget operator in London by the 2012 Olympics with over 7,000 rooms in the Capital.
Travelodge is successfully leading a price revolution in the hotel industry focusing on low prices, including one million rooms at £26 - available up to 12 months in advance. The company has delivered these low prices for its six million customers through its commitment to operational efficiency and its low cost business model. Eighty per cent of its bookings are now made online through its industry leading website.
Grant Hearn, Travelodge Chief Executive, said: "This is a great day for Travelodge, our employees and all hotel customers as DIC's investment will allow us to accelerate our low price revolution. We are delighted that they have shown such belief in the potential of our business and have the same drive and ambition as everyone at Travelodge. We will continue to lead the industry through our innovation and growth in the UK and look at international opportunities in the longer term. Over the last three years we have delivered significant shareholder returns whilst investing in our brand and opening more hotels than any other UK operator."
Sameer Al Ansari, Chief Executive Officer of Dubai International Capital, said: "We are delighted to have successfully acquired Travelodge. It is a strong brand with good growth potential, and an excellent fit for DIC. The budget hotel sector is growing and, in our view, is underdeveloped in the UK market. Travelodge's outstanding management team has an aggressive expansion plan which we are confident will give us an excellent return on this investment."
Carl Parker, Permira, added: "Travelodge has undergone profound change since the Permira Funds acquired the business in February 2003, increasing the number of rooms from 13,000 to an expected 20,000 by the end of 2006, with a focus on openings in city centres. We are confident that Travelodge and its excellent management team will continue to succeed under the ownership of Dubai International Capital, as the company moves forwards to the next stage of its development in an exciting growth market."
Travelodge's financial adviser on the transaction was UBS Investment Bank.
About Dubai International Capital
DUBAI INTERNATIONAL CAPITAL
PERMIRA (Finsbury Communications)
|Also See:||Dubai Investment Group Acquires the Essex House Hotel from Strategic Hotel Capital LLC; Jumeirah Hospitality & Leisure Named to Replace Starwood as Operator of the 605-room Hotel Bearing Two Brands: Westin and St. Regis / September 2005|
|Oxford Lodging and Dubai Investment Group Jointly Receive the ALIS’ “2005 Single Asset Transaction” Award for the $440 million Purchase of New York's Essex House / February 2006|