Global lifestyle hospitality company SBE has announced its intention to acquire the 13-strong US-based Morgans Hotel Group, including three London properties.
The deal, which includes the Mondrian, Delano and Hudson brands, will involve a significant investment from Cain Hoy Enterprises, a global real estate investment company headed by Jonathan Goldstein. In addition, the Yucaipa Companies will convert its existing stake in Morgans into an ownership interest in SBE.
Founded in 1984 by Ian Schrager and Steve Rubell, Morgans Hotel Group is widely credited as the creator of the first boutique hotel. Its London portfolio includes the Sanderson, St Martins Lane and Mondrain, while in the US it operates Delano in South Beach; Mondrian in Los Angeles, New York and South Beach; Hudson in New York; Morgans and Royalton in New York; Clift in San Francisco; and Shore Club in South Beach. It also has a Delano in Las Vegas and a franchised hotel, 10 Karaköy, in Istanbul, Turkey, with the Mondrian Doha set to open later this year.
SBE will take over direct ownership of the Delano in South Beach, the Hudson in New York and the Clift in San Francisco, alongside the management of the rest of the portfolio. These properties will be added to SBE's own hotel collection in North America operating under the SLS, Hyde and The Redbury brands.
Sam Nazarian, founder, chairman and chief executive of SBE, said: "We have long admired Morgans, its impressive history and culture of service and innovation, so we're delighted to reach an agreement on this transaction.
"Our strategic vision is to operate these amazing and unique lifestyle properties in key international gateway markets, and Morgans' hotels, along with their talented team, fit perfectly within that vision".
Jonathan Goldstein of Cain Hoy said: "Sam Nazarian and SBE are industry leaders in the lifestyle hospitality sector. The Morgans portfolio is an ideal addition to SBE's existing stable of iconic brands. We are confident that Sam's keen management team will leverage this acquisition into strong growth.''
Yucaipa founder Ron Burkle expressed his solid support for SBE and the Morgans acquisition.
"Sam Nazarian is a best-in-class operator in the hospitality space," he said. "Sam and his team will bring their creativity, strategy and discipline to Morgans' iconic portfolio, helping define the boutique hotel space for years to come."
After completion of the Morgans acquisition, SBE will feature a portfolio of 20 hotels with more than 6,000 keys and more than 90 entertainment and food & beverage outlets. A further five hotels are due to open by the end of 2016.
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