IHG to pay $430m for boutique brand Kimpton Hotels
Eyeing up international expansion of brand, which has 62 hotels across the US
Intercontinental Hotels Group (IHG) is set to acquire Kimpton Hotels & Restaurants, with plans to expand the American boutique brand into international markets.
It is to pay US $430 million in cash for the operator, which manages 62 hotels in cities and resorts across the US, as well as 71 hotel-based restaurants and bars. It also 16 hotels in the pipeline.
IHG said the acquisition of Kimpton, which it claims is the world’s largest independent boutique hotel operator, will establish it as the “clear market leader”, complementing its Hotel Indigo and Even Hotels brands.
IHG chief executive Richard Solomons said: “The acquisition is another step in IHG’s well-established asset-light strategy of investing in high-quality growth, building on a strong track record of developing iconic global brands.
“We will use our scale, network of owner relationships, and powerful digital platforms to accelerate Kimpton’s growth both within the US and internationally.
“The hugely talented Kimpton team will continue to be led by Mike DeFrino, currently Kimpton’s COO, and I am delighted to welcome all of Kimpton’s associates and owners to the IHG family. The culture and values of both companies are well aligned and Kimpton will bring a wealth of expertise and specialist skills to IHG.”
With the addition of the Kimpton portfolio, IHG says it will have 200 open and pipeline boutique and lifestyle hotels across 19 countries.
Setting out the reasons for the acquisition, IHG said it saw “significant opportunity to expand the brand in Europe and Asia where there is strong demand for boutique brands”.
Kimpton’s EBITDA is expected to hit US $20 million this year and IHG is predicting it will be able to grow this to $39 million by 2017 from the opening of hotels in the pipeline and the achievement of back office and technology savings.
The transaction will be financed through existing cash resources and new debt facilities, and is expected to close during the first quarter of 2015 upon satisfaction of certain customary conditions, including anti-trust clearance and Kimpton shareholder consent.