Colony makes €1b investment in Accor

The global private equity real estate firm has made a strategic investment in European hotel owner and services provider Accor.

Global private equity real estate firm Colony Capital announced it would invest €1 billion ($1.3 billion) in Accor, a European lodging company.

Paris-based Accor has nearly 4,000 hotels in 90 countries, including the Sofitel, Novotel, Red Roof Inn and Motel 6 brands. The company also provides services to corporate clients and public institutions, including loyalty programs and food vouchers.

According to a statement, Colony is investing €500 million in bonds redeemable in shares, with the additional €500 million in the form of convertible bonds maturing in 2010.

Thomas Barrack, founder, chairman and chief executive officer of Colony, will join Accor’s supervisory board, along with Sébastien Bazin, the CEO of Colony’s European subsidiary, Colyzeo. Bazin will also become the chairman of a special commitments board.

Bazin said the transaction would a chance to grow Accor’s business, as well as “work closely with the [French financial group] Caisse de Dépôts, an investor in Colyzeo and a very significant shareholder in Accor.”

Colony and Accor have been working together since 1998, including a partnership in Accor’s casino business in Europe.

The investment was made by Colony Investors IV, as well as Colyzeo, the European investment fund created in 2003 from the partnership between Colony and Eurazeo.

Since 1991, Colony has invested over $12.5 billion. The hospitality sector represents 35 percent of Colony’s investments.