Spirit Group sells Premier Lodge to Whitbread

Spirit Group, backed by a consortium led by Texas Pacific Group, Blackstone, CVC Capital Partners and Merrill Lynch Global Private Equity, has sold its Premier Lodge budget hotels to Whitbread, which will merge them with Travel Inn to create a new brand, Premier Travel Inn. The business was sold for a total cash consideration of £536.2m (on a cash and debt free basis), representing £505m for 141 hotels (comprising 10,062 bedrooms), 9 of which are currently under development, and £31.2m for 19 co-located pub restaurants. The proceeds from the sale of Premier Lodge will be used to reduce borrowings.

Spirit Group acquired Premier Lodge as part of the S&N Retail business that was acquired for £2.51bn from Scottish & Newcastle in October 2003. Shortly afterwards, Spirit conducted a strategic review, which resulted in a decision to dispose of Premier Lodge, to focus on its 2,400 pubs, restaurants and bars.