The Goldman Sachs Group, Inc.
), Goldentree Asset Management LP and Avenue Capital Group LLC are
set to jointly acquire 144 U.K. hotels that are already leased to
their previously acquired company Travelodge Hotels Ltd - one of
U.K.'s biggest budget hotel chains. The value of the deal has been
struck at around £500 million ($830 million). The acquiring
companies will have an equal one-third stake in the hotels.
Goldman, Goldentree and Avenue Capital took over Travelodge Hotels
from Dubai International Capital in Aug 2012 as they bailed out the
company through a debt-for-equity swap. This financial
restructuring included writing off bank debt of £235 million and
infusion of £75m of fresh capital.
The current owners of the portfolio of 144 hotels are
Lloyds Banking Group plc
), Prestbury Investment Holdings Ltd., West Coast Capital and
Aldersgate Investments. The hotels are situated in London and
Launched in the U.K. in 1985, Travelodge has grown from a mere
roadside hotel chain to a major budget hotel chain in the nation.
It now runs more than 500 hotels (nearly 37,000 rooms) in the U.K.,
Ireland and Spain.
The latest move comes in line with Travelodge's initiatives to
boost profitability through acquisition of properties and revamping
buildings. Notably, the company has invested £57 million in the
last 18 months for modernization of its hotels.
As the hotel sector in the U.K. is bouncing back after the
recession, private-equity companies particularly those which are
based in the U.S. are viewing this sector as a lucrative area to
Currently, Goldman carries a Zacks Rank #2 (Buy). Some
better-ranked stocks in the finance space include Select Bancorp,
) and Piper Jaffray Companies (
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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