Carlyle completes B&B Hotel deal for EUR 480m

Global alternative asset manager The Carlyle Group has completed the acquisition of the pan-European B&B Hotel Group for EUR 480 mln. B&B operates a chain of 223 budget hotels with a total of 16,162 rooms across France, Germany and Italy.

Equity for the transaction comes from Carlyle Europe Partners III, a EUR 5.4 bn buyout fund, and the EUR 2.2 bn Carlyle Europe Real Estate Partners III fund. The transaction follows the real estate team's recent acquisition of the EUR 803 mln White Tower portfolio and the investment this week in the London student housing market.

The vendor of B&B Hotels is European investment firm Eurazeo, which signalled in August that it was in exclusive negotiations with Carlyle to sell the hotel chain for about EUR 485 mln.

Eurazeo has a EUR 4 bn portfolio and is one of the leading listed investment companies in Europe. It has major stakes in hotel group Accor, ANF, APCOA, B&B Hotels, Elis, Europcar and Rexel. ANF, Eurazeo's real estate investment unit, acquired B&B Hotels in November 2007 for EUR 471 mln, including debt of around EUR 300 mln.

Launched in Brittany, France in 1990, B&B Hotels is at the 'high end' of the budget hotel segment, serving business and leisure travellers. It is the third-largest budget hotel group in France after Accor and Louvre Hôtels. In Germany, it is the second-largest budget hotel chain with 35 hotels, compared with eight in 2005. B&B Hotels also has operations in Italy, Poland, Portugal and Hungary.

Carlyle said it intends to expand the company by investing in the continued renovation of current hotels and by accelerating the hotel opening pace across Europe. This will include further penetration of the core French market, significant expansion in Germany - which currently accounts for only 34 properties in the total portfolio- and growth in Italy, as well expanding the chain into new territories such as Poland, Portugal and the Netherlands.

Eric Sasson, managing director, 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. Together with our European buyout colleagues, we look forward to helping grow B&B into the top pan-European operator of budget hotels.'