AccorHotels intends to acquire a 50 percent stake in
lifestyle hospitality group SBE Entertainment Group. Accor stated in a media
release that it had signed a letter of intent and entered into exclusive
negotiations to purchase half of SBE's common equity, which is partially held
by Cain International, for $125 million.
SBE is a leading lifestyle hospitality company that
develops, manages and operates global properties and brands, including branded
luxury residences, serviced apartments, wellness and spa platforms, and dining
and entertainment experiences. Its hospitality and restaurant brands include
Redbury, Mondrian, Hyde, Delano and SLS, while its restaurant group brands
include Umami Burger, Katsuya, Cleo and Leynia.
The deal will give Accor a leg up to rapidly expand its
presence in the luxury lifestyle segment, particularly in gateway cities in
North America, including Los Angeles, Miami, Las Vegas and New York. The Accor
investment will enable SBE to drive international growth into new markets in
the Middle East and Latin America. SBE's pipeline features projects in Dubai,
Rio de Janeiro, Mexico City, Tokyo, Atlanta and Washington D.C. SBE hotels will
be distributed on Accor's platforms and become part of the Le Club AccorHotels
loyalty program.
The transaction is expected to close July 31. SBE founder
and CEO Sam Nazarian and SBE's management team will stay on to lead the company
from SBE's New York City headquarters. Under the planned deal, Nazarian would own
the remaining 50 percent of SBE and Accor would invest $194 million in a new
preferred debt instrument that it would use to redeem existing preferred units,
bringing its total investment to $319 million.