The acquisition is expected to complete in late September. Travelodge's senior management team will remain in place under DIC.
'We are delighted to have successfully acquired Travelodge,' said Sameer Al Ansari, Chief Executive Officer of Dubai International Capital. 'It is a strong brand with good growth potential, and an excellent fit for DIC. The budget hotel sector is growing and, in our view, has immense potential in the UK market. Travelodge's outstanding management team has an aggressive expansion plan which we are confident will give us an excellent return on this investment .'
Travelodge, the UK's second largest budget hotel company , operates 291 hotels, with 279 in the UK, nine in Ireland and three in Spain. The company's aggressive UK growth strategy is on track to deliver a total of 32,000 UK rooms in the next five years. Travelodge aims to be the biggest budget operator in London by the 2012 Olympics, with over 7,000 rooms in the British capital.
The acquisition of Travelodge is in line with DIC's strategy to diversify the assets of its parent company, Dubai Holding. Investments are made on the basis of the size, strength and growth potential of the business, the expected returns, and the quality of the management team and its ability to achieve its objectives.
Commenting on the deal, Grant Hearn, Travelodge Chief Executive, said: 'We are pleased that DIC has shown such confidence in our business and our people. Our new owners share our ambitions for Travelodge to lead the budget hotels sector here in the UK and grow the business internationally.'
DIC's financial adviser on the transaction was Citigroup Global Markets Limited.
DIC's acquisition of Travelodge is the latest in a series of value-driven investments by the company, including a US$1 billion investment in DaimlerChrysler, the £800 million acquisition of The Tussauds Group, £700 million acquisition of Doncasters, and anchor investments of US$272 million in JD Capital investment company in Jordan and US$150 million in Ishraq, a company formed to develop and own up to 22 Express by Holiday Inn hotels in the Middle East.
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