Irish hotel group Dalata will acquire the leasehold interest of Gibson Hotel in Dublin, the Croydon Park Hotel in South London, the Clarion Hotel in Cork and the Clarion Hotel in Limerick for what the Irish Times is estimating will be an enterprise value of €40 million. Dalata will also take over the management of the Clarion Liffey Valley Hotel in Dublin, under a short term management contract, and plans to invest €14 million over the next two years to refurbish the four properties. When the refurbishments are complete, the hotels will be rebranded under the Clayton brand.
The leasehold interest includes operating leases with an average term of 18 years outstanding.
Dalata deputy chief executive Dermot Crowley told the Irish Times that the deal gives the hotel group a further 960 rooms in the cities of Dublin, Cork and Limerick, and will add 211 rooms to its UK portfolio with the Croydon hotel.
Underlying earnings before interest, tax, depreciation and amortization for the four hotels in 2015—after adjusting for costs and revenues that will not transfer as part of the transaction—is expected to be €4.1 million. Including revenues from the short term management contract, underlying EBITDA is expected to be €4.7 million.
Dalata told the Times that the acquisition is subject to approval of the Competition and Consumer Protection Commission and Grant Thornton acting as receiver of the freehold interest in the Gibson Hotel.