Positions Company to Increase F&B Revenues, Drive ADR Growth and Win New Management Agreements
Morgans Hotel Group Co. (NASDAQ: MHGC) announced that it has closed on its purchase of a 90% controlling interest in The Light Group , a leading lifestyle food and beverage company currently operating numerous venues for MGM Resorts International. This acquisition, while being immediately accretive to the Company's earnings, also provides Morgans with a first class food and beverage platform, a creative and experienced management team, and renowned brand names.
TLG is a leading hospitality management company with a ten-year track record of delivering cutting-edge food and beverage experiences at world class properties. TLG operates numerous venues in Las Vegas pursuant to management agreements with MGM, including nightclubs, such as The Bank Nightclub at Bellagio Hotel and Casino and Haze at ARIA Resort and Casino at CityCenter, restaurants, such as Yellowtail Japanese Restaurant & Lounge at Bellagio Hotel and Casino and Diablos Mexican Cantina at Monte Carlo Hotel, pool lounges and bars.
Total consideration for the acquisition is approximately $46.5 million, of which $28.5 million was paid in cash. The remaining $18.0 million is subject to the achievement of $18.0 million of EBITDA from TLG's existing business over the 27 months subsequent to the transactions' closing and is represented by convertible notes that bear interest at 8%, mature four years from the date of closing and are convertible into shares of the Company at $9.50 per share.
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