AccorHotels and sbe Entertainment Group have signed a letter of intent and entered into exclusive negotiations for AccorHotels to acquire a 50 per cent stake in sbe.
If completed, the deal will see AccorHotels acquire the 50 per cent of sbe’s common equity held in part by Cain International for $125 million.
Sam Nazarian will continue to own the remaining half of sbe.
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’ leading global hospitality platform while remaining an independent luxury lifestyle operator.
sbe will continue to be led by its founder, Sam Nazarian, well as its expert management team while retaining its global headquarters in New York.
Nazarian said: “This partnership with AccorHotels marks a new milestone in sbe’s history.
“This long-term investment by AccorHotels provides sbe, its customers and hotel owners with greater depth and breadth around the world and supports our collective ambition to be the best lifestyle hospitality company in the market.
“Building on our acquisition of Morgans Hotel Group in 2016, this investment will further accelerate our growth both domestically in the United States and in new markets internationally, particularly in Europe.
“Myself and the over 7,000 associates at sbe are thrilled and honoured to partner with AccorHotels and be part of the amazing, innovative and pioneering culture that my dear friend, chief executive Sébastien Bazin, and his team have implemented.”
Founded in 2002 by Sam Nazarian, sbe is a lifestyle hospitality company that develops, manages and operates award-winning global properties and brands.
sbe’s leading 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 its Disruptive Restaurant Group platform, sbe has created global award-winning culinary brands Katsuya, Umami Burger, Cleo, Leynia, Diez & Siez and Filia and innovative entertainment brands including Hyde nightclub and dayclub, Nightingale, Privilege dayclub Black Orchid, S Bar, Skybar and the Doheny Room.
Through this investment, sbe will accelerate its international growth with expansion into new markets outside of the US, including priority growth markets in the Middle East and Latin America.
Sébastien Bazin, chairman of AccorHotels: “I am delighted to announce this strategic partnership with one of the most innovative Groups in the luxury lifestyle space worldwide.
“It marks a new step in expanding AccorHotels’ footprint in this fast growing segment in key US cities such as Miami, Los Angeles or Las Vegas, and in other international destinations.
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.