Accor has entered into negotiations with Qatar First Bank LLC (Public) to sell 10.8 percent of Ennismore shares into the bank’s investment consortium. At a value of €185 million, the deal values Ennismore at more than €2 billion – 18 times Ennismore’s forecast EBITDA for next year.
It was last year that French hotel giant Accor merged with Ennismore, taking on 66.67 percent of the shareholding, with Ennismore founder, and co-CEO Sharan Pasricha holding the remaining 33.33 percent.
Ennismore shares valuation
Under the new deal, which is expected to close by the end of the year, Accor would retain a controlling stake with 62.2 percent of Ennismore and Pasricha would hold the remaining shares. At 27 percent with a €2 billion valuation, Pasricha would hold €540 million worth of shares.
The deal also implies a price 18 times the 2023 forecasted earnings before interest, taxes, depreciation, and amortisation of Ennismore. Accor said in a statement the deal “demonstrates the excitement and attractiveness of this fast-growing segment.”
Why now buy Ennismore shares?
It added that in Ennismore, RevPAR already “significantly exceeds” 2019 numbers and that in under a year, Ennismore has been opening a new hotel every other week.
The statement shone a light on the opening of SLS and 25hours in Dubai in particular as cause for the excitement; and that Ennismore hotels see F&B driving 50 percent of revenue exceeding 2019 numbers.
The statement said: “Ennismore has delivered a high growth performance opening a new hotel every two weeks, expanding its collection of brands in new regions, launching flagship properties SLS & 25hours in Dubai.”
The deal will also follow Ennismore’s “continued simplification strategy,” – where Rixos, Accor’s all-inclusive hotel brand, and Paris Society, Accor’s F&B operator of restaurants and event management – will join Ennismore.
The combined Ennismore group will now consist of over 130 hotels operating in nearly 40 countries, with over 275 F&B venues.
Sebastien Bazin, chairman and CEO of Accor said: “In only a few years, Accor together with Sharan Pasricha, Fettah Tamince and Laurent de Gourcuff, the three talented founders of Ennismore, Rixos and Paris Society, has built a powerhouse of global lifestyle brands supported by dedicated entrepreneurs and talented teams.
“Pulling them together and joining forces with our Qatari partners will further unlock the value of Ennismore and take it to the next level. This is a recognition of the strength of Ennismore’s portfolio of lifestyle brands and its unique business model based on constant innovation, highest quality, sense of purpose and solid growth.”
Qatar on the Accor board
According to Accor’s shareholding structure, Qatar Investment Authority currently holds 11.3 percent of the shares of the company as of December 31, 2021. Accor board members also include Ugo Arzani, Head of Retail & Consumer at Qatar Investment Authority (QIA); and Asma Abdulrahman Al-Khulaifi, a lawyer who works closely with QIA.
You can read the statement on the sale of Ennismore shares here.