ACCOR CLOSES ON SBE STAKE
Structure includes $125 million for 50% stake, $194 million for debt
AccorHotels’ $319 million acquisition of sbe Entertainment Group, originally expected to close in July, officially gives the Paris-based hotelier a 50% of the hospitality company known for such brands as SLS, Delano, Mondrian, Hyde, Katsuya and Cleo.
Pryor Cashman advised sbe on the deal and cited a variety of complex issues, including the parties’ joint-venture arrangement, equity and transaction tax structuring, financing and recapitalization. Under the terms of the deal, AccorHotels acquired half of sbe’s common equity held in part by Cain Intl. for $125 million. Additionally, AccorHotels agreed to invest $194 million in a new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain Intl. sbe founder and ceo Sam Nazarian will continue to run sbe independently.
The partnership allows AccorHotels to expand its footprint in growing segments in key U.S. cities as well as other global destinations. sbe’s pipeline includes projects in some of the most important global gateway cities such as Atlanta, Chicago, Washington D.C., Dubai, Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos. By the end of 2018, sbe will operate 25 hotels and 7,498 rooms, with a majority in North America. AccorHotels has a portfolio of over 4,500 properties across the world, and the deal is another feather in the cap for the hotelier’s acquisition strategy.
Photo of SLS South Beach penthouse: Courtesy of sbe Entertainment Group