(ATLANTA. Ga. -- March 22, 2002) Six Continents’ acquisition of the UK Posthouse Hotels was today recognized by the global financial community as the hotel portfolio Deal of the Year at the annual International Hotel Investment Forum (IHIF), in Berlin.
The Six Continents’ deal was one of four short-listed including the Nomura/Le Meridien, Hilton/Scandic and Royal Bank of Scotland/Hilton transactions. A panel of judges from all sectors of the hotel industry including operators, owners, financiers and consultants were not only impressed by the attractive multiple and the strategic fit into its UK Holiday Inn business, but also by the sheer simplicity of Six Continents’ deal structure.
Six Continents made its award-winning transaction in April 2001 when it announced that it had acquired the entire business of Posthouse from Compass Group PLC for £810 million ($567 million USD), a multiple of 7.9 times EBITDA. The 79 former Posthouse mid-scale hotels have 12,300 rooms and many are located at key motorway junctions, in city centers and at airports with a particularly strong network in the southern region of the UK. Between 1988 and 2001 the Posthouse portfolio had benefited from more than £200 million ($140 million USD) of investment.
The majority of the Posthouse hotels identified for re-branding have successfully been converted to the Holiday Inn brand, with the last conversion scheduled to take place on the March 28, 2002. The seven hotels earmarked for disposal at the time of acquisition have successfully been sold. The re-branding has created a market-leading position for Holiday Inn in the UK with almost 100 hotels. These now benefit from a globally recognized brand, worldwide reservations system and loyalty program. At the time of the acquisition Six Continents announced plans to invest £75 million ($52.5 million USD) of expansionary capital to upgrade the estate to Holiday Inn standards over the next three years, and these plans are now well advanced.
David Bland, managing director for Six Continents Hotels, Europe, Middle East and Africa, paid special tribute to Frank Croston, area president, Six Continents Hotels UK & Ireland and his team, for the speed at which the hotels had been integrated within Holiday Inn UK. He went on to say, “This is a resounding endorsement of our strategy to further strengthen the leading position of Holiday Inn through increased distribution in key European markets. And we’re delighted that the acquisition has been recognized by the international investment community.”
Almost 1,000 delegates attended IHIF this year making it Europe’s largest hotel forum. The IHIF Deal of the Year awards were presented at a ceremony at the Hotel Inter-Continental Berlin today by Michael Hirst, consultant Insignia Hotels and Bob Lewis, director of International Hotel Property Services for PKF.
Six Continents Hotels, the hotel business of Six Continents PLC of the United Kingdom [LON:SXC, NYSE:SXC (ADRs)], owns, manages, leases or franchises more than 3,260 hotels and 514,000 guest rooms in nearly 100 countries and territories.
Logos, product and company names mentioned are the property of their respective owners.