Category: Europe - Industry economy -
Group or hotel buyout
This is a press release selected by our editorial committee and published online for free on 2019-06-28
The hotels are being sold for an aggregate gross selling price of EUR 313 million, implying an accretive net disposal EV/EBITDA of approximately 19x and a net gain of EUR 62 million to MINT in 2019. Following completion of the hotel sales, MINT’s subsidiary NH Hotel Group (“NHH”) will operate the hotels under lease agreements for an initial term of 20 years with options to extend for a total term of up to 60 years. Subject to customary closing conditions, the sale and leaseback of these properties is expected to be completed during the third quarter. Following the transaction, the hotels will continue to be operated by MINT through NHH under their current brand names.
Strategically, the transactions: (i) increase the internal rate of return of MINT’s 2016 acquisition of the 14-asset Tivoli portfolio to over 20% on an unlevered basis, (ii) pay back nearly the entire capital deployment from MINT’s 2016 Tivoli acquisition through the sale of only three of the 14 acquired Tivoli properties while still retaining over 75% of the total portfolio EBITDA, and (iii) allow MINT to retain continued upside from the hotels through sustainable leases in partnership with a strong institutional investor, while retaining ownership of the Tivoli brand and its Portuguese and Brazilian operating platforms.
Going forward, MINT will continue to maximize value creation for its shareholders. This will be done through selective pursuit of new acquisition opportunities and further initiatives to strengthen its balance sheet by considering strategic asset rotation. In terms of asset initiatives, as a result of MINT’s 94% investment in NHH MINT now has a strong platform to engage with respected hotel real estate institutional investors in Europe and Latin America and deep experience in structuring and operating under long-term sustainable lease structures, opening an important new strategic channel for growth and shareholder returns.
“The completion of the sale and leaseback transaction is a key milestone for MINT, Minor Hotels and NHH,” said Mr. Dillip Rajakarier, COO of MINT and CEO of Minor Hotels. “The transaction underlines our ability to strategically rotate assets in partnership with the right institutional investor, with whom we will share future earnings. Completion of the transaction will strengthen our balance sheet, as we have committed to do, allow MINT to retain significant value and further upside through sustainable long-term leases of the properties under our brands and realize further operational improvement through efficiencies across the NHH Southern European Platform. The transaction demonstrates a tangible strategic enhancement of the overall portfolio with MINT’s ability to yield strong returns in developed markets, in addition to our proven track record in emerging markets with secular high growth potential. MINT is fully committed, as ever, to deliver value to our shareholders, whether in the form of operational growth, new acquisition opportunities or asset enhancement and rotation.”
About Minor International
Minor International (MINT) is a global company focused on three core businesses: hospitality, restaurants and lifestyle brands distribution. MINT is a hotel owner, operator and investor with a portfolio of 516 hotels under the Anantara, AVANI, Oaks, Tivoli, NH Collection, NH Hotels, nhow, Elewana, Marriott, Four Seasons, St. Regis, Radisson Blu and Minor International brands in 54 countries across Asia Pacific, the Middle East, Africa, the Indian Ocean, Europe, South and North America. MINT is also one of Asia’s largest restaurant companies with over 2,200 outlets system-wide in 27 countries under The Pizza Company, Swensen’s, Sizzler, Dairy Queen, Burger King, Thai Express, The Coffee Club, Riverside and Benihana brands. MINT is one of Thailand’s largest distributors of lifestyle brands and contract manufacturers. Its brands include Anello, Bodum, Bossini, Brooks Brothers, Charles & Keith, Esprit, Etam, Joseph Joseph, OVS, Radley, Save My Bag, Zwilling J.A. Henckels and Minor Smart Kids.
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About Invesco Real Estate
Invesco Real Estate is a global leader in the real estate investAment management business with €61.5bn in real estate assets under management, 508 employees and 21 regional offices across the U.S., Europe and Asia. The firm was established in 1983 and has been actively investing in core, value-add and opportunistic real estate strategies since 1992. In Europe, IRE has eight offices in London, Munich, Milan, Madrid, Paris, Prague, Luxembourg and Warsaw, and around 155 employees. It manages 160 assets across 13 European countries and with assets under management of €11.1bn.