Carlyle combines buyout, real estate capital to fund B&B Hotel purchase

EUROPE - The Carlyle Group has acquired B&B Hotel Group, operator of 223 hotels across France, Germany and France, with equity from one of its private equity buyout funds and one if its real estate vehicles.

Carlyle Europe Partners III, a €5.4bn buyout fund, and Carlyle Europe Real Estate Partners III, a €2.2bn real estate fund, provided the capital for the €480m deal.

B&B is described as being positioned at the 'high end' of the budget business and holiday segment of the hotel market.

Carlyle intends to expand the company, launched in France in 1990, by investing in the continued renovation of current hotels and by accelerating the hotel opening pace across Europe.

This will include further growth in the core French market, but also significant expansion in Germany, which currently accounts for only 34 of the properties in the total portfolio.

Carlyle anticipates further growth in Italy, as well expanding the chain into new territories such as Poland, Portugal and the Netherlands.

Franck Falezan, managing director at The Carlyle Group, said: "B&B has high customer satisfaction and has had strong market performances and strong business resilience during the downturn.

"We are confident in the continued high growth potential of the company in existing and new European markets."

The deal follows Carlyle's recent acquisitions in the UK, including investments in London student housing and the £671m purchase of the White Tower portfolio.

It is the third investment in six months for Carlyle's private equity buyout fund following the acquisition of heat exchangers manufacturer Giannoi.

Eric Sasson, managing director of real estate at The Carlyle Group, said: "Our ability to offer B&B's management team a single partner with two sets of complementary and relevant skills, as well as offices and expertise throughout Europe, was central to setting Carlyle apart from other suitors."

George Sampeur, chief executive of B&B Hotels, added: "Our success underscores the appeal of our concept, and this is why we have a 98% customer satisfaction rate."