Menzies plans acquistions after cash injection
Derbyshire-based Menzies Hotels plans to buy more hotels in the UK after securing extra funding of up to £30m.
The new investor is venture capital firm BancBoston Capital, which has led the acquisition of a 55% stake in Menzies for £11.5m in cash.
BancBoston and another investor, Indigo Capital, have promised a further £10m in loans and shares and this is expected to attract further loans of £20m.
Menzies said it would use the money to finance new hotel acquisitions and joint ventures. It is looking to areas of the UK where it does not already have a presence. These include Leeds, Bristol, the M4 corridor, Glasgow and Edinburgh.
It has not ruled out buying another hotel group as well as individual properties.
The buy-in leaves the group's founder and chairman, Nick Menzies, with a 45% stake in the company. Original investors whose stake was bought out included 3i and Royal Bank of Scotland.
Founded in 1992, Menzies owns and operates 18 three- and four-star hotels throughout England. They include the 103-bedroom Avant hotel in Oldham, which has just finished a £1.5m refurbishment to bring it up to four-star level, the 99-bedroom Mickleover Court in Derby, and the 95-bedroom Baron's Court in Walsall.
Menzies appointed advisors back in February to held it look at ways to expand the firm. Options included selling the company or merging with a rival as well as finding new backers.
In 1998 it abandoned plans to float on the London Stock Exchange.
by David Shrimpton david.shrimpton@rbi.co.uk
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