Proprium, the real estate private equity firm spun out of Morgan Stanley, has sold its 35% stake in Motel One to majority shareholder One Hotels & Resorts for a purchase price of €1.25 bn.
Proprium acquired the 35% stake in the hotel group as part of a €65 mln investment in 2007 – Motel One’s last capital increase. Proprium recapitalised the investment in 2019.
The sale price of €1.25 bn values the company at an enterprise value of €4.1 bn and a 2023 EBITDA valuation multiple of 14 times. Including dividends, the sale price implies a multiple on invested equity in excess of 20 times for the original investors.
Since its foundation by Dieter Müller in Munich in 2000, Motel One has developed into a highly profitable, fast-growing brand hosting nine million guests annually.
Since Proprium’s initial investment, Motel One has expanded in Germany and internationally and currently operates 94 hotels with 26,470 rooms.
Including the pipeline, growth to 117 properties with more than 32,000 rooms in 56 cities is secured. The recent launch of the new lifestyle brand The Cloud One Hotels marked the opening of the group's first hotel in New York.
Philipp Westermann, partner & head of Europe of Proprium, who led the transaction for Proprium, said: 'We are proud to have been a long-term partner to Dieter Müller and the Motel One team on its impressive growth journey for more than 15 years.
'Motel One has delivered outstanding profitable growth since inception by combining a unique design-led hotel concept, a disciplined and cash generative business model and an entrepreneurial culture.
'While the sale of our stake in Motel One will generate very attractive returns for our investors, we leave Motel One very well positioned with an enormous potential for future growth. The investment in Motel One exemplifies Proprium's commitment to platform investing, aimed at delivering outsized private equity returns within the real estate industry.'
Müller said: 'Together with Proprium, we have built Motel One into an international platform and brand and expect continued strong and profitable growth in the future. We thank the Proprium team led by Philipp Westermann for their trust and contribution.'
The transaction closed on 2 April, with Morgan Stanley acting as financial advisor. Hengeler Mueller and Freshfields acted as legal advisors to OHR and Proprium respectively.
