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Mon, 2 July 2018

AccorHotels to Acquire 50% Stake in sbe

AccorHotels and sbe Entertainment Group have signed a Letter of Intent and entered into exclusive negotiations for AccorHotels to acquire a 50% stake in sbe.

 AccorHotels will acquire the 50% of sbe's common equity held in part by Cain International for $125 million. Sam Nazarian will continue to own the remaining 50% of sbe.

 In addition, AccorHotels will invest $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.

AccorHotels’ total investment in sbe will be $319 million.

Mondrian Park Avenue in New York City. Click to enlarge.

Sbe will continue to be led by its Founder and CEO Sam Nazarian as well as its management team while retaining its global headquarters in New York.

Sam Nazarian, Founder and CEO of sbe, 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.”

Founded in 2002 by Sam Nazarian, sbe’s hospitality and residential brands include SLS, Delano, Mondrian, Hyde, The Originals (Sanderson, St. Martin Lane, Hudson, 10 Karakoy, Shore Club) and the Redbury Hotels.

Through its Disruptive Restaurant Group platform, sbe has created culinary brands such as Katsuya, Umami Burger, Cleo, Leynia, Diez & Siez and Filia and innovative entertainment brands including Hyde nightclub and dayclub, Nightingale, Privilege dayclub Black Orchid, S Bar, Skybar and the Doheny Room.

 Landmark hotels in its portfolio include, Delano South Beach in Miami, SLS Baha Mar in the Bahamas, Mondrian Doha in Qatar, Hyde Bellagio in Las Vegas, Mondrian Park Avenue in New York City (pictured) and the newly-opened 57 story SLS LUX Brickell in Miami. Upcoming openings include Delano Rio de Janeiro, Delano Dubai at the Palm and Hyde Midtown in Miami.

Through this investment, sbe will accelerate its international growth with expansion into new markets outside of the US, including priority growth markets in the Middle East and Latin America. sbe’s pipeline includes projects in some of the most important global gateway cities such as Atlanta, Chicago, Washington D.C., Dubai, Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos.

By the end of 2018 sbe will operate 25 hotels, comprising 7,498 keys with a majority in North America, 170 restaurants and entertainment venues in global destinations as well as new properties in the Middle East, Asia and Latin America.

 It currently has a further 20 hotels and residences around the world in its pipeline, as well as 59 standalone restaurants and nightlife venues. In addition, sbe has sold 1,500 branded residential units valued at $2 billion with over 2,500 units valued at $2.5 billion in its pipeline.

Through this partnership, AccorHotels will expand its current geographic footprint in gateway North American cities such Los Angeles, Miami, Las Vegas and New York with iconic hotels. Additionally, sbe’s core millennial customer base will gain access to the AccorHotels platform.

 The transaction is subject to regulatory approvals. It should be completed by 31 July 2018.

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