Accor and Ennismore today announced they are entering into exclusive negotiations to form the world’s leading lifestyle operator in the hospitality sector, focusing on one of the fastest growing segments of the industry.
Through this all-share merger, a new autonomous and fully asset light entity will bring together an unrivalled portfolio of world class brands, including The Hoxton, Gleneagles, Delano, SLS, Mondrian, SO/, Hyde, Mama Shelter, 25hours, 21c Museum Hotels, TRIBE, JO&JOE and Working From_. The new entity will be headquartered in London and will take the name Ennismore.
The Hoxton Paris, France
Delano South Beach Miami, United States © Scott Snider
25hours Berlin, Germany
Mondrian Los Angeles, United States © Marie Buck
The Hoxton Williamsburg, United States
Mama Shelter Lyon, France © Francis Amiand
Sharan Pasricha, Founder and CEO of Ennismore and Gaurav Bhushan, CEO of the Accor Lifestyle division will become Co-CEOs of the combined entity, alongside an experienced, highly skilled and international management team coming from the various brands and industries across the globe. Accor will be the majority shareholder of the new entity, with Sharan Pasricha holding a substantial minority position.
At its inception, the combined entity will comprise 12 brands with 73 hotels in operation with a committed pipeline of more than 110 hotels and another c. 70 hotels under active discussion, and over 150 destination restaurant and bars. Based on the current network and pipeline the lifestyle platform should achieve an EBITDA of over c. €100m by midterm, the project resulting in significant cost synergies of approximately €15m per year.
In order to form this joint venture, Accor intends to buy out its partners in sbe (see the article below), Mama Shelter and 25hours. The planned combination also envisages the formation of a new company which will hold all the leased assets under the combined entity’s brands. The deconsolidation of the existing leases will have a €52m positive effect on Accor’s consolidated net debt in 2020.
Under the leadership of Sharan Pasricha and Gaurav Bhushan, each brand will retain their unique culture and purpose, supported by dedicated teams and with the full support of their founders, including the Trigano family, founders of Mama Shelter; Christopher Hoffman, founder of 25 Hours; Sam Nazarian, founder of sbe; Laura Lee Brown and Steve Wilson for 21C, and Melissa and Mark Peters for TRIBE.
This new, unified and powerful venture will benefit from an in-house global creative studio, designing award-winning interiors and brand communication; an expert digital and technology team innovating the guest experience; and a team of restaurant and bar specialists crafting unique concepts rooted in their neighbourhoods.
Accor’s Lifestyle operations today represent c.5% of Accor’s fees and over 25% of the pipeline fees. Growth will be accelerated, building on a strong footprint in Europe and the U.S., and a rapidly expanding presence in Asia Pacific, the Middle East and South America supported by Accor’s development teams.
Closing is expected to occur in the first semester of 2021 and is subject to the employee consultation process and customary regulatory authorizations for projects of this type.
Sharan Pasricha, Founder & CEO of Ennismore said: “Over the last nine years, our mission with Ennismore has always been creating hospitality brands that inspire discovery. I'm passionate about how brands make you feel, from the personalised digital experience to the design, and with an incredible team of operators and creatives around me, we have expanded The Hoxton across the globe; reimagined Gleneagles; and crafted unique restaurant and bar concepts. This exciting autonomous entity with Accor - one with culture and brand purpose at its heart - allows us to come together to build on our combined portfolio of unique lifestyle brands, accelerate our growth and explore new markets. I look forward to working with Gaurav and Sébastien on this exciting next chapter as we become an unrivalled player in the hospitality industry.”
Gaurav Bhushan, CEO of Accor’s Lifestyle operations said: “Joining forces with Sharan and Ennismore’s talented teams will be a major step in Accor’s development strategy. With this combination, we are putting together an unrivalled portfolio of unique brands that appeals to owners, partners and guests, supported by the greatest set of talents in the industry, state of the art distribution and tools and a common ambition to continue to grow and innovate. I very much look forward to our journey together.”
Sébastien Bazin, Chairman & CEO of Accor said “Lifestyle, entertainment, places with a soul have been at the heart of our development and growth strategy over the last years. Partnering with Ennismore’s founder Sharan and his great teams will take our Lifestyle ambition to a new and exciting level. With this combination, we are leading the hospitality industry by creating the largest and fastest growing ecosystem of world class brands. Lifestyle is a sector fueled by passionate and daring entrepreneurs, constantly pushing the boundaries of a reinvented vision of travelling the world. I am proud Accor has been able to join forces with many of the most creative and talented ones. This new powerful combination is set to become the engine of our exciting future growth.”
As part of its simplification and asset-light strategy, and with the ambition of accelerating its momentum in the fast-growing Lifestyle hospitality sector, Accor today announces the signing of binding agreements on a new sbe Group’s ownership structure.
Under the terms of these agreements, Accor is taking full ownership of sbe’s Hotel asset light business including the Delano, Mondrian, SLS, and Hyde hotel brands along with most of sbe’s Food & Beverage brands including Cleo, Fili’a or Carna by Dario Cecchini.
These brands will be at the heart of Accor’s newly created global Lifestyle platform (see separate release on Accor’s Lifestyle Platform). Sbe currently operates 22 hotels, with more than 40 properties in the pipeline, which has more than doubled since Accor’s initial investment in sbe in 2018, with key upcoming openings such as Mondrian London and SLS Dubai in 2021.
Eldridge, a holding company with a unique network of businesses across finance, technology, real estate, and entertainment, is acquiring sbe’s two remaining assets: the Hudson Hotel in New York and Delano in Miami.
In parallel, Sam Nazarian takes full ownership of sbe’s Disruptive Restaurant Group Platform (DRG) and its 15 owned restaurant and nightlife venues along with an increased majority ownership of C3, a leading player in digital kitchens and lifestyle food halls business.
This cash and asset swap transaction entails a $300 million cash investment from Accor almost entirely through the redemption of sbe’s debt.