London-based growth markets investor Actis Capital has sold its minority stake in Plateno Hotel Group (formerly named 7 Days Inn) to Shanghai JinJiang International Hotels Development for an enterprise value of CNY 10 billion ($1.53 billion; €1.40 billion), it said.
The sale marks the full exit of Actis from its seven-year investment in Plateno.
Actis made the investment through its Actis Emerging Markets 3, a 2007-vintage vehicle that closed on $2.5 billion and is fully invested. The fund has drawn commitments from UK development finance institution CDC Group, the San Francisco Employees' Retirement System, Indiana Public Retirement System (INPRS) and Aberdeen SVG Private Equity, according to PEI’s Research & Analytics.
Actis invested $65 million in Plateno in 2008 alongside Warburg Pincus and committed an additional $688 million in 2013 together with private equity firms The Carlyle Group and Sequoia Capital to support its delisting from the New York Stock Exchange (NYSE).
Actis initially invested in Plateno when it was a very young company, a start-up with 160 hotels, Actis director Max Lin told Private Equity International. “We backed the company and the founder through the 2008 financial crisis, partnering with the founder and his management team for the next seven years or so, taking it public in 2009 on the NYSE, taking it private in 2013, and exiting now so that Plateno can become an important part of Jinjiang Group’s grand strategy.”
He added that after the take-private in 2013, Plateno Group changed the strategy and launched a multitude of mid- to high-end hotel brands such as Portofino Hotel, Lavande Hotel, James Joyce Coffetel and Zmax Hotel, which attracted designers and entrepreneurs to use their platform. Throughout Actis’ investment period, Actis partnered with Plateno’s founder and management to build out its current success, Lin said.
From an operator of 160 economy hotels, Plateno has become one of China's leading hotel operators with over 2,500 hotels, including a partnership with Hilton Hotels & Resorts, a statement said.
JinJiang Hotels is a subsidiary of the Chinese state-owned enterprise Jinjiang Group. The acquisition will make JinJiang Group one of the top five hotel operators in the world, with over 6,000 hotels in 55 countries.
Actis has invested over $2 billion in China’s consumer sector since 2001, with a particular interest in the med-tech devices and consumable sector. It invested in endoscopy consumables manufacturer Nanjing Micro-Tech, in-vitro diagnostics instruments provider Chemclin, food group Jiashili and Taiwanese restaurant chain Bellagio.
Skadden advised the private equity firms on the sale.