Accor is merging a quarter of its brands into a new US$1 billion company with the owner of the Hoxton hotel chain to form an operator in the lifestyle hospitality sector, one of the fastest-growing segments of the industry.
The asset-light portfolio of brands in this all-share merger includes 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 and CEO of Ennismore, and Gaurav Bhushan, CEO of the Accor Lifestyle division, will become co-CEOs of the combined entity. Accor will be the majority shareholder, with Pasricha holding a substantial minority position.
The combined entity will comprise 12 brands with 73 hotels in operation, with a committed pipeline of more than 110 hotels and another 70 hotels under active discussion, and over 150 destination restaurant and bars. Based on the current network and pipeline, the lifestyle platform should achieve an EBITDA of over €100 million (US$118 million) by midterm, the project resulting in significant cost synergies of approximately €15 million (US$18 million) per year.
Separately on Tuesday, Accor announced the signing of binding agreements on a new SBE ownership structure. Accor is taking full ownership of SBE’s asset light hotel business, including the Delano, Mondrian, SLS and Hyde brands, along with most of SBE’s F&B brands, including Cleo, Fili’a or Carna by Dario Cecchini. This cash and asset swap transaction entails a US$300 million cash investment from Accor almost entirely through the redemption of SBE’s debt.
In parallel, SBE Founder 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.
In addition, Greenwich, Connecticut-based Eldridge, a holding company with businesses across finance, technology, real estate and entertainment, is acquiring two SBE assets, the Hudson Hotel in New York and Delano in Miami.
Under the leadership of Pasricha and Bhushan, each brand will retain its culture and purpose, supported by dedicated teams and their founders, including the Trigano family, founders of Mama Shelter; Christopher Hoffman, founder of 25 Hours; Nazarian of SBE; Laura Lee Brown and Steve Wilson of 21C; and Melissa and Mark Peters for Tribe.
Accor’s Lifestyle operations today represent 5% of Accor’s fees and over 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. The deal is expected to close in the first half of 2021.