KSL Capital Partners, the Denver-based private equity firm, has acquired the Village Urban Resorts hotel chain from De Vere Group in a deal reportedly valued at £485 million or around US$761 million.
With the transaction, KSL takes on a portfolio of 25 properties in the UK comprising 3,100 rooms, plus three more under construction in Aberdeen, Edinburgh and Glasgow.
De Vere had talked expansion for the chain as of 2012, but this deal has ended that, at least for De Vere.
"Village occupies a unique position in the UK market because of all it has to offer consumers," said Coley Brenan, a principal at KSL. "With a very strong following and thousands of loyal members, we believe Village has tremendous potential for future growth. We are very pleased to add Village to KSL’s portfolio of investments in the UK."
Gary Davis, who previously served as CEO of Malmaison and Hotel du Vin, will serve as CEO of Village. Davis previously oversaw the expansion of Village from 2007 to 2011 and the global expansion programs at Hard Rock Café and Planet Hollywood.
As The Financial Times reports, KSL "won a hotly contested race for the Village chain," a process that started in the summer when De Vere put it on the market with an initial price tag of £450 million.
The auction then reportedly attracted 18 bids and came down to a three-way fight between KSL, rival U.S. equity group KKR and Hong Kong-based Great Eagle.
As FT further reports, "the proceeds of the sale go toward debt repayments borne by Lloyds Bank, which inherited De Vere four years ago as part of the bank’s acquisition of HBOS. De Vere was saved from collapse after Lloyds wrote off £650 million of the bad loans held in HBOS’s hospitality assets by converting debt into ordinary shares."
It's been a fluid couple of years for KSL. In March 2013, KSL bought UK-based Malmaison hotels group, which included 27 Malmaison and Hotel du Vin hotels, for what at the time was reported as a £200-milion deal.
Later that year, in June, Omni Hotels & Resorts acquired five resorts from KSL. The properties were later be reflagged under the Omni brand on July 1 and added to the company's Resort Collection. The portfolio included 2,362 guestrooms, 12 golf courses, five spas and more.Terms of the acquisition are not disclosed.
The five properties were Barton Creek Resort & Spa in Austin, Texas; La Costa Resort and Spa in Carlsbad, Calif.; Rancho Las Palmas Resort & Spa in Rancho Mirage, Calif.; The Grove Park Inn in Asheville, N.C.; and The Homestead in Hot Springs, Va. A sixth KSL resort was acquired by Omni earlier this year.