Investee Company – Kew Green Hotels Ltd (UK)
Investee Company Business Type – Economy Hotel Chain
Type of Financing – Start-up funding
Equity Providers – Bank of Scotland, and Moorfield Group.
Equity Leader (Individual) – Andrew McCulloch Bank of Scotland
Debt Providers – Bank of Scotland
Debt Type – Senior debt, mezzanine, and loan stock
Debt Leader (Individual) – Andrew McCulloch Bank of Scotland
Equity Amount – Equity breakdown unknown
Total Deal Value – £6.1 million, euro9.6 million
Other Advisors – Bank of Scotland used its own advisors
Comments – Kew Green Hotels Ltd is a new company set up to operate as franchisees, under a long term lease, a chain of branded economy hotels with an average of 120 rooms. It is currently working with investors Moorfield group, which will contribute its expertise by introducing and assessing the economic impact of potential sites for development of new hotels.
Economy hotels is one of the fastest growing sectors in the hotel market. In 1999 it was worth £500 million and it has been growing at a rate of 30% per annum. Kew Green’s turnover is expected to be £2.7 million in 2003, rising to £12.82 million in 2005.
Marc Gilbard, managing director of Moorfield, said: “We see our investment… as part of our strategy of investing in property and property-related opportunities with exciting growth prospects, where in addition to providing equity and loan finance, we can use our skills and work with management to build their business.”
Andrew McCulloch, of Integrated Finance at Bank of Scotland, said: “The team has an excellent track record in the industry and its business model taps into the economy hotel market that is experiencing continued growth and consumer appetite.”