Graphite triples money on hotel deal(4)

UK leisure group Whitbread has bought Graphite Capital's Golden Tulip hotel franchise for £44 million, tripling the mid-market firm's return. The business has nine hotels under development.

Graphite Capital, a UK mid-market firm, is selling the UK business of Golden Tulip, a budget hotels group, to UK leisure group Whitbread for £44 million, making a return of three times its original investment. 


By the end of the year Whitbread will re-badge the group using its Premier Inn brand, the UK’s largest and fastest growing hotel company. The franchise arrangements with Golden Tulip Worldwide have been terminated.


Golden Tulip manages five 3-star Tulip Inn hotels and one 4-star Golden Tulip hotel in the UK with a total of 770 rooms.  All are leasehold properties.  The group is planning nine more hotels, accommodating more than 1,300 rooms, and scheduled to open within the next two years.


In August 2002 Graphite led the fund-raising to establish the business.  Turnover reached £15.2 million in 2006 when the hotels contributed earnings of £2.3 million.


Graphite senior partner, Andy Gray, said: “This transaction enables us to crystallise an attractive gain for investors and the management team while enabling Whitbread to develop the business further within its own successful hotel operation.”


Andy Gray, Jenny Michelman, Perry Chapman and Simon ffitch managed the transaction for Graphite.