Travelodge, the UK's fastest growing hotel company has today been acquired by Dubai International Capital ("DIC"), a private equity firm, for a consideration of £675 million from the Permira Funds. The acquisition is unconditional and is expected to complete by late September.
Following completion of the transaction, Keith Hamill (Chairman), Grant Hearn (Chief Executive), Guy Parsons (Chief Operating Officer) and Jon Mortimore (Finance Director) will stay with the business and continue to manage Travelodge under DIC's ownership.
Travelodge operates 291 hotels, with 279 in the UK, nine in Ireland and three in Spain. The budget chain's aggressive UK growth strategy is on track to deliver a total of 32,000 UK rooms in the next five years. Travelodge aims to be the biggest budget operator in London by the 2012 Olympics with over 7,000 rooms in the Capital.
Travelodge is successfully leading a price revolution in the hotel industry focusing on low prices, including one million rooms at £26 - available up to 12 months in advance. The company has delivered these low prices for its six million customers through its commitment to operational efficiency and its low cost business model. Eighty per cent of its bookings are now made online through its industry leading website.
Grant Hearn, Travelodge Chief Executive, said:
"This is a great day for Travelodge, our employees and all hotel customers as DIC's investment will allow us to accelerate our low price revolution. We are delighted that they have shown such belief in the potential of our business and have the same drive and ambition as everyone at Travelodge. We will continue to lead the industry through our innovation and growth in the UK and look at international opportunities in the longer term. Over the last three years we have delivered significant shareholder returns whilst investing in our brand and opening more hotels than any other UK operator."
Sameer Al Ansari, Chief Executive Officer of Dubai International Capital, said:
"We are delighted to have successfully acquired Travelodge. It is a strong brand with good growth potential, and an excellent fit for DIC. The budget hotel sector is growing and, in our view, is underdeveloped in the UK market. Travelodge's outstanding management team has an aggressive expansion plan which we are confident will give us an excellent return on this investment."
Carl Parker, Permira, added:
"Travelodge has undergone profound change since the Permira Funds acquired the business in February 2003, increasing the number of rooms from 13,000 to an expected 20,000 by the end of 2006, with a focus on openings in city centres. We are confident that Travelodge and its excellent management team will continue to succeed under the ownership of Dubai International Capital, as the company moves forwards to the next stage of its development in an exciting growth market."
Travelodge's financial adviser on the transaction was UBS Investment Bank.
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Media Contacts:
TRAVELODGE
Greg Dawson +44 1844 358644
Rollo Head/James Leviton +44 20 7251 3801
DUBAI INTERNATIONAL CAPITAL
Joanna Macdonald, Dubai +4497150 559 7137
Tom Wyatt, ReputationInc, London
+44 20 7758 2800
+44 7776 240145 (mobile)
PERMIRA (Finsbury Communications)
James Wyatt-Tilby
Nick Woodruff
+44 20 7251 3801
Notes to editors:
About Travelodge
Travelodge was the first budget hotel brand to launch in UK. In 1985, Forte-owned Travelodge opened its first hotel on the A38, North of Lichfield, before developing another six roadside hotels in its first year. Travelodge was acquired by Permira in February 2003. Travelodge employs 4,700 staff. Travelodge has 40 hotel openings planned in the UK this year including Manchester, Birmingham and London Stansted Airport.
About Dubai International Capital
Established in 2004, Dubai International Capital LLC. [DIC] is a Dubai based international investment company that primarily focuses on private equity. It is a wholly owned subsidiary of Dubai Holding, a large and diversified group that operates in the fields of healthcare, technology, finance, real estate, research, education, tourism, energy and communications. UK investments include the £800 million acquisition of Tussauds Group and the £700 million acquisition of the Doncasters Group Limited.
About Permira
Permira is a leading international private equity specialist. As an independent business, Permira is owned and controlled by its partners. The firm's team of 100 professionals, based in Frankfurt, London, Madrid, Milan, New York, Paris, Stockholm and Tokyo, advises the Permira Funds with a total committed capital of more than Euro 20 billion. Since 1985, the Permira Funds have completed over 280 private equity transactions. During the last year, the Permira Funds have committed to eight transactions with a combined transaction value of over Euro 25 billion. www.permira.com