Accor in Merger Talks with Ennismore; Acquires sbe Hotel Brands
INTERNATIONAL REPORT—Accor and Ennismore have entered into exclusive negotiations to become a leading lifestyle operator in the hospitality sector, focusing on one of the fastest growing segments of the industry. Accor has also taken over full ownership of she’s hotel brands.
Through this all-share merger, a new autonomous and fully asset-light entity will bring together a portfolio of brands including The Hoxton, Gleneagles, Delano, SLS, Mondrian, SO/, Hyde, Mama Shelter, 25hours, 21c Museum Hotels, Tribe, Jo&Joe and Working From_.
The new entity will be headquartered in London and will take the name Ennismore.
Sharan Pasricha, founder/CEO, Ennismore, and Gaurav Bhushan, CEO, Accor lifestyle division, will become co-CEOs of the combined entity, alongside an international management team coming from the various brands and industries across the globe. Accor will be the majority shareholder of the new entity, with Pasricha holding a substantial minority position.
At its inception, the new Ennismore will comprise 12 brands with 73 hotels in operation with a committed pipeline of more than 110 hotels and another approximately 70 hotels under active discussion, and more than 150 destination restaurant and bars.
In order to form this joint venture, in addition to sbe, Accor intends to buy out its partners in Mama Shelter and 25hours. The planned combination also envisages the formation of a new company which will hold all the leased assets under the combined entity’s brands.
Under the leadership of Pasricha and Bhushan, each brand will retain their unique culture and purpose, supported by dedicated teams and with the full support of their founders, including the Trigano family, founders of Mama Shelter; Christopher Hoffman, founder of 25hours; Sam Nazarian, founder of sbe; Laura Lee Brown and Steve Wilson for 21C; and Melissa and Mark Peters for Tribe.
Accor’s lifestyle operations today represent approximately 5% of Accor’s fees and more than 25% of the pipeline fees. Growth will be accelerated, building on a strong footprint in Europe and the U.S., and a rapidly expanding presence in Asia-Pacific, the Middle East and South America supported by Accor’s development teams.
Closing is expected to occur in the first quarter of 2021 and is subject to the employee consultation process and customary regulatory authorizations for projects of this type.
“Over the last nine years, our mission with Ennismore has always been creating hospitality brands that inspire discovery,” said Pasricha. “I’m passionate about how brands make you feel, from the personalized digital experience to the design, and with an incredible team of operators and creatives around me, we have expanded The Hoxton across the globe; reimagined Gleneagles; and crafted unique restaurant and bar concepts. This exciting autonomous entity with Accor—one with culture and brand purpose at its heart—allows us to come together to build on our combined portfolio of unique lifestyle brands, accelerate our growth and explore new markets. I look forward to working with Gaurav and Sébastien on this exciting next chapter as we become an unrivaled player in the hospitality industry.”
Bhushan added: “Joining forces with Sharan and Ennismore’s talented teams will be a major step in Accor’s development strategy. With this combination, we are putting together an unrivaled portfolio of unique brands that appeals to owners, partners and guests, supported by the greatest set of talents in the industry; state-of-the-art distribution and tools; and a common ambition to continue to grow and innovate. I very much look forward to our journey together.”
Sébastien Bazin, chairman/CEO, Accor said, “Lifestyle, entertainment, places with a soul have been at the heart of our development and growth strategy over the last years. Partnering with Ennismore’s founder Sharan and his great teams will take our lifestyle ambition to a new and exciting level. With this combination, we are leading the hospitality industry by creating the largest and fastest growing ecosystem of world class brands. Lifestyle is a sector fueled by passionate and daring entrepreneurs, constantly pushing the boundaries of a reinvented vision of traveling the world. I am proud Accor has been able to join forces with many of the most creative and talented ones. This new powerful combination is set to become the engine of our exciting future growth.”
Accor Takes Full Ownership of sbe Hotel Brands
As part of its simplification and asset-light strategy, and with the ambition of accelerating its momentum in the fast-growing lifestyle hospitality sector, Accor has signed binding agreements on a new sbe Group’s ownership structure.
Under the terms of these agreements, Accor is taking full ownership of sbe’s hotel asset-light business including the Delano, Mondrian, SLS and Hyde hotel brands, along with most of sbe’s F&B brands including Cleo, Fili’a or Carna by Dario Cecchini.
These brands will be at the heart of Accor’s newly created global lifestyle platform. Sbe currently operates 22 hotels, with more than 40 properties in the pipeline, which has more than doubled since Accor’s initial investment in sbe in 2018, with key upcoming openings such as Mondrian London and SLS Dubai in 2021.
Eldridge, a holding company with a network of businesses across finance, technology, real estate and entertainment, is acquiring sbe’s two remaining assets: the Hudson Hotel in New York and Delano in Miami.
In parallel, Sam Nazarian takes full ownership of sbe’s Disruptive Restaurant Group Platform (DRG) and its 15 owned restaurant and nightlife venues along with an increased majority ownership of C3, a leading player in digital kitchens and lifestyle food halls business.
This cash and asset swap transaction entails a $300 million cash investment from Accor almost entirely through the redemption of sbe’s debt.
Pryor Cashman advised sbe on the transaction.