Seeking to expand its footprint in the U.S. luxury lifestyle
segment, AccorHotels has signed a letter of intent to acquire a 50% percent in SBE
Founded in 2002 by Sam Nazarian, SBE is a New York-based
company that develops, manages and operates lifestyle hotels, residences,
restaurants and nightclubs. Its hotel brands include SLS, Delano, Mondrian,
Hyde, The Originals and Redbury.
The companies said AccorHotels will acquire the 50% of SBE's
common equity held in part by Cain International for $125 million, while
Nazarian will continue to own the remaining 50%.
In addition, AccorHotels will 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 International. AccorHotels' total investment
in SBE will be $319 million.
Sebastien Bazin, chairman and CEO of AccorHotels, said the
investment "marks a new step in expanding AccorHotels' footprint in this
fast growing segment in key U.S. cities such as Miami, Los Angeles or Las
Vegas, and 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 said.
The companies said the investment by AccorHotels will allow
SBE to leverage AccorHotels' global hospitality platform while remaining an
independent luxury lifestyle operator. SBE will continue to be led by Nazarian
and will retain its headquarters in New York.
"This 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," Nazarian said. "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."
By the end of 2018 SBE will operate 25 hotels, the majority
in North America. It has 20 more in its global pipeline.
AccorHotels is one of the world's largest hospitality
companies, with more than 4,300 hotels, resorts and residences in 100