Louvre Hotels lined up for jumbo 3Q sale with Deutsche Bank and Goldman Sachs advising
The auction pipeline for the second half of the year just got a large addition out of France. Starwood Capital is bringing to market its portfolio company Louvre Hotels Group, which could be one of the largest deals during 2H14, according to sources familiar with the situation.
The French budget hotel chain has mandated Deutsche Bank and Goldman Sachs to advise on the upcoming sale, which is expected to kick-off in September. Louvre Hotels’ annual EBITDA is in the region of EUR 125m, said the sources.
“Around EUR 125m EBITDA is the figure given but a lot of people are questioning that number since the company generated EUR 95m-105m over the last few years,” commented one of the sources.
Valuation is likely to come in the 8x to 9x multiple range.
Louvre Hotels operates 1100 hotels in 43 countries through six brands – Kyriad and Kyriad Prestrige, Campanile, Premiere Classe, Golden Tulip, Tulip Inn and Royal Tulip. Starwood acquired the group in 2007.
Louvre Hotels is particularly strong in France but less so in other regions, said the sources. Most of the group’s hotels are based in Europe (964), with the remainder in the Middle East (41), North and South America (35), Africa (34) and Asia-Pacific (39).
All large private equity firms such as the likes of Advent International, Apollo, CVC, Cinven, TPG and PAI Partners are expected to look at the asset when it hits the market. Trade players could also participate. Chinese groups looking to get a foothold in Europe such as HNA, which acquired a stake in Spain’s NH Hotels, or French group Fonciere des Murs could also show an interest, said the sources and a sector banker.
It is not clear how many of its properties Louvre Hotel still owns as it has already done some sale and leasebacks, noted the first source.
“I also wonder if there are any pension liabilities in the group,” added the sector banker.