Paris-based private equity firm PAI Partners is in negotiations to sell its budget B&B Hotels to American financial services firm Goldman Sachs.
Since buying B&B Hotels three years ago, PAI Partners has grown the hospitality company from a local French brand to an international business with 486 properties and nearly 43,000 guestrooms across 12 European and Latin American countries.
When PAI acquired B&B Hotels in March 2016 from Carlyle Group and Montefiore Investment, the lodging company was valued at €790 million, or $882 million. (Carlyle acquired B&B in 2010 for €480 million.) Since 2016,, the brand's earnings before interest, tax, depreciation and amortization (EBITDA) has nearly doubled, which the company credits to an aggressive growth strategy averaging one new or refurbished opening per week. Today, the Financial Times estimates the company could be worth €1.9 billion, or $2.1 billion.
“We are proud to have been part of B&B’s growth journey over the last three years,” said Gaëlle d’Engremont, partner at PAI Partners. "B&B is an excellent example of an entrepreneurial approach to business, which has helped achieve superior growth and customer service. Today, B&B is a strong European platform that offers consistent high quality in its budget segment and is very well placed to capture further growth.”
“PAI have been very supportive partners, helping us grow by 16 percent per annum in the last three years,” said Fabrice Collet, B&B Hotels' CEO. “They have given us the backing to invest in delivering the highest levels of customer services. Additionally, we have benefited from their extensive experience of acquisitions and international expansion to further develop in Europe while also initiating our development outside of the continent...We look forward to continuing our growth trajectory alongside Goldman Sachs.”
If the sale to Goldman Sachs goes through, it will be the fourth recent disposition from the PAI Europe VI fund, following the sale of European nursing home company Domus VI, sensor maker Innovista Censors and Konecta, a provider of outsourced contact centers and business process outsourcing services in Spain and Latin America.
The deal could close this year.