AccorHotels and sbe Entertainment Group (sbe) have signed a Letter of Intent and entered into exclusive negotiations for AccorHotels to acquire a 50 per cent stake in sbe. The transaction is subject to regulatory approvals. It should be completed by July 31, 2018.
AccorHotels will acquire the 50 per cent of sbe’s common equity held in part by Cain International for $125 million USD. Sam Nazarian, founder and CEO of sbe, will continue to own the remaining 50 per cent. In addition, AccorHotels will invest $194 million USD in a new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain International. AccorHotel’s total investment in sbe will be $319 million USD.
“This partnership with AccorHotels marks a new milestone in sbe’s history. The long-term investment by AccorHotels provides sbe, its customers and hotel owners with greater depth and breadth around the world and supports our collective ambition to be the best lifestyle hospitality company in the market,” says Nazarian. “Building on our acquisition of Morgans Hotel Group in 2016, this investment will further accelerate our growth both domestically in the United States and in new markets internationally, particularly in Europe.”
Sébastien Bazin, chairman and CEO of AccorHotels, says the partnership marks a new step in expanding AccorrHotels’ footprint in the luxury lifestyle space in key U.S. cities such as Miami, Los Angeles and Las Vegas, as well as in other international destinations. “The ‘new luxury’ is all about exclusive experiences and incredible lifestyle concepts and sbe brands have the perfect know-how that will complete perfectly the AccorHotels portfolio,” he explains. “We remain committed to providing all our guests with unparalleled service and always renewed experiences around the world.”
Founded in 2002 by Nazarian, sbe is a leading lifestyle hospitality company that develops, manages and operates properties and brands around the world. Its brands include SLS, Delano, Mondrian, Hyde, The Originals (Sanderson, St. Martin Lane, Hudson, 10 Karakoy, Shore Club) and the Redbury Hotels. Landmark destinations in its portfolio include Delano South Beach in Miami, SLS Baha Mar in The Bahamas, Mondrian Doha in Qatar, Hyde Bellagio in Las Vegas, Mondrian Park Avenue in New York City and newly-opened 57-storey SLS LUX Brickell in Miami. Upcoming openings include Delano Rio de Janeiro, Delano Dubai at the Palm and Hyde Midtown in Miami. Through its Distruptive Restaurant Group platform, it has created award-winning culinary brands Katsuya, Umami Burger, Cleo, Leynia, Diez & Siez and Filia, as well as entertainment brands such as Hyde nightclub and dayclub, Nightingale, Privilege dayclub Black Orchid, S Bar, Skybar and the Doheny Room.
Through this investment, sbe will accelerate expansion into new markets outside of the United States, including in the Middle East and Latin America. Projects in its development pipeline include properties in Atlanta, Chicago, Washington D. C., Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos. By the end of 2018, it will operate 25 hotels (7,498 keys) and 150 restaurants and entertainment venues.
The partnership will also allow AccorHotels to expands its geographic footprint in gateway North American cities such as Los Angeles, Miami, Las Vegas and New York. AccorHotels has more than 4,300 hotels, resorts and residences across 100 different countries. Its brand portfolio includes Raffles, Fairmont, Sofitel, Swissôtel, Grand Mercure, Pullman, Banyan Tree and more.