AccorHotels has formed a partnership with sbe Entertainment Group.
AccorHotels will acquire the 50 percent of sbe’s common equity held in part by Cain International for $125 million.
sbe will continue to own the remaining 50 percent. In addition, AccorHotels will invest $194 million in a new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain International. AccorHotels’ total investment in sbe will be $319 million.
This long-term investment will allow sbe to leverage AccorHotels’ global hospitality platform while remaining an independent luxury lifestyle operator. sbe will continue to be led by Sam Nazarian, founder and CEO, as well as its existing management team while retaining its global headquarters in New York.
Founded in 2002, sbe is a lifestyle hospitality company that develops, manages and operates award-winning global properties and brands. sbe’s hospitality and residential brands include SLS, Delano, Mondrian, Hyde, The Originals (Sanderson, St. Martin Lane, Hudson, 10 Karakoy, Shore Club) and the Redbury Hotels.
Through this investment, sbe will accelerate its international growth with expansion into new markets outside of the United States, including priority growth markets in the Middle East and Latin America. sbe’s pipeline includes projects in some of the most important global gateway cities such as Atlanta, Chicago, Washington, D.C., Dubai, Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos.
By the end of 2018, sbe will operate 25 hotels, comprising 7,498 keys with a majority in North America, 170 award-winning restaurants and entertainment venues in global destinations, as well as new properties in the Middle East, Asia and Latin America. It currently has a further 20 hotels and residences around the world in its pipeline, as well as 59 standalone restaurants and nightlife venues. In addition, sbe has sold 1,500 branded residential units valued at $2 billion with over 2,500 units valued at $2.5 billion in its pipeline.
Through this partnership, AccorHotels will expand its current geographic footprint in gateway North American cities such Los Angeles, Miami, Las Vegas and New York with iconic hotels. Additionally, sbe’s core millennial customer base will gain access to the AccorHotels platform.
With its global hotel development platform and presence in 100 countries, AccorHotels will play a key role in developing sbe’s luxury lifestyle hotel, restaurant and entertainment brands globally. sbe hotels will also be distributed on the AccorHotels distribution platform, be featured on Accorhotels.com and will be part of the AccorHotels loyalty program.
The transaction is subject to regulatory approvals. It should be completed by July 31, 2018.
