Hospitality groups, Accor and Ennismore are entering into exclusive negotiations to form a new lifestyle operator in the hospitality sector, named Ennismore, as part of a US$1bn merger.
Through the all-share merger, the management of all Ennismore hotels will become a part of Accor’s lifestyle brand division and create a combined entity of 12 brands with 73 hotels in operation, plus a pipeline of approximately 110 hotels.
The new operator will include the following brands: Gleneagles, Delano, SLS, Mondrian and Hyde – all of which have distinctive spa and wellness concepts – plus SO/, The Hoxton, Mama Shelter, 25h, 21c Museum Hotels, TRIBE, JO&JOE and Working From_.
Sharan Pasricha, Ennismore founder and CEO, and Gaurav Bhushan, CEO of the Accor Lifestyle Division will become co-CEOs of the combined entity, which will be two-thirds owned by majority shareholder, Accor, and a third owned by Pasricha.
Closing is expected to occur in Q1 2021.
Based on the current network and pipeline the lifestyle platform should achieve an EBITDA (earnings before interest, taxes, depreciation and amortisation) of over €100m (US$121.7m, £89.9m) by midterm.
This will see the two companies benefit from significant cost synergies of approximately €15m (US$18.2m, £13.5m) annually.
Sébastien Bazin, Accor chair and CEO said: “Partnering with Ennismore’s founder Sharan and his great team will take our Lifestyle ambition to a new and exciting level. With this combination, we’re leading the hospitality industry by creating the largest and fastest-growing ecosystem of world-class brands.
“This new powerful combination is set to become the engine of our exciting future growth.”
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 (US$63.3, £46.8m) positive effect on Accor’s consolidated net debt in 2020.
Pasricha commented: “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.”
