Dubai International Capital (DIC) acquired UK-based Travelodge Hotels, Britain’s fastest growing hotel company for £675m from the Permira Funds. The acquisition completed in late September. Permira bought Travelodge and Little Chef for a total consideration of £712m on a debt and cash free basis in January 2003.
“We are delighted to have successfully acquired Travelodge,” said Sameer Al Ansari, CEO of DIC. “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 is the UK’s second largest budget hotel company. It 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.
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.
DIC’s acquisition of Travelodge is the latest in a series of value-driven investments by the company, including a US$1bn investment in DaimlerChrysler, the £800m acquisition of The Tussauds Group, £700m acquisition of Doncasters, and anchor investments of US$272mn in JD Capital investment company in Jordan and US$150m in Ishraq, a company formed to develop and own up to 22 Express by Holiday Inn hotels in the Middle East. DIC also launched the US$500 million MENA Infrastructure Fund with HSBC to invest in infrastructure opportunities across the Middle East and North Africa. JD200 million (US$272m) investment company ‘JD Capital’ targeting opportunities in Jordan. Dubai International Capital manages an international portfolio of diverse assets that provide Dubai Holding and its stakeholders with Value growth Diversification Strategic investments and relationships DIC focuses on three primary asset classes: Direct private equity investments Private equity funds and co-investments Listed equity and strategic investments.