Ireland's Dalata makes splashy €455-million buy

Dalata, which operates 38 hotels comprising 6,000 rooms solely in Ireland, has announced it intends to acquire most of the Moran Bewley’s Hotel Group for a reported €455 million, or around US$560 million.

Dalata is acquiring nine of the Moran hotels, comprising 2,506 rooms in Ireland and Britain. The transaction does not include the Red Cow Moran Hotel and adjoining Red Cow Inn in south west Dublin, which will remain under the control of Limerick businessman Tom Moran and his wife Sheila Moran.

The hotels which are being sold include the Silver Springs Moran Hotel in Cork as well as the four Bewleys Hotels in Dublin. The other four hotels are in Britain—the Crown Moran and Chiswick Moran Hotels in London and the Bewleys Hotels in Manchester and Leeds.

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The deal is subject to clearance from competition authorities, and shareholder approval. A meeting has been called for January 5.

Dalata will also reportedly repay about €280 million of debt on the Moran Bewley’s Group’s books.

As the Irish Times reports, Dalata plans to issue 18.3 million new shares at €2.75 apiece to help fund the deal. This transaction will result in it having fully invested the €265 million in proceeds it raised from its stock market IPO earlier this year.

Dalata CEO Pat McCann called the deal "transformational," adding that, "It is a business we have admired for a long time and the acquisition is a rare opportunity to acquire a large, well-invested portfolio of hotels."

He  added: "The acquisition allows the group to scale up its operations significantly and in particular expands the group’s position in the key Dublin market."

Moran is one of the more profitable hotel companies in the UK. In the 11 months to the end of December 2013, the company made an operating profit of €19.1 million on revenues of €77.8 million.

Dalata’s company-owned chain includes various Maldron hotels, the Clayton in Galway and Whites of Wexford. Its lease agreements and management contracts include the neighbouring Clyde Court and Ballsbridge hotels, Citywest in Saggart and Aghadoe Heights Hotel & Spa in Kerry.

Last December, Moran wrote down the value of its properties by €224 million and wrote off the €182 million in goodwill attaching to its purchase of the Bewleys hotel chain in 2008.

 

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