Milestone makes it six for 2007(3)

Milestone Capital Partners has made yet another exit, with the £70 million sale of hotel business The Eton Collection to rival group JJW Luxury Collection.

Milestone Capital Partners, an Anglo-French buyout firm that has been hitting the exit trail in earnest in 2007 after a difficult 2006, has completed its latest disposal with the £70 million (€103 million; $141 million) sale of boutique hotel group The Eton Collection.

The hotel group has been sold to rival chain JJW Luxury Collection, part of food and leisure conglomerate MBI International, in a deal that values the company at about £70 million. It is the eighth exit from Milestone’s second fund, and its sixth exit this year.

The Eton Collection owns five boutique hotels, including the flagship Threadneedles hotel in London. Milestone first backed the company in 1998, after its foundation by hotelier Peter Tyrie, and has since invested more than £32 million in the business. The group had revenues of £14.6 million last year.

The combined group will now own a total of 15 hotels throughout Europe, including properties in Paris, Vienna and Portugal.

JJW is a subsidiary of MBI International, the vehicle of Saudi businessman Sheikh Mohamed Bin Issa Al Jaber. On his personal website, Al Jaber describes himself as “self-made businessman, philanthropist and UNESCO Special Envoy for Education, Human Rights, Tolerance, and Cultures to build peace and democracy in the Middle East.”

Bill Robinson, managing partner of Milestone, said the investment “perfectly demonstrates our ability to buy-and-build a successful business through challenging conditions.”

Milestone has now exited all but one of the nine investments it made from its second fund, after coming under pressure from investors last year to sell some assets ahead of a planned fundraising. It has now returned €199 million, equivalent to 97 percent of the original €205 million 1998 fund.

The only remaining business in the fund’s portfolio is IX Europe, a datacentre service provider, which is in the process of being sold to trade buyer Equinix for €117 million – a deal that would give Milestone a 2.8 times return on investment.

Milestone has also sold four of the nine businesses from its third fund, which closed in 2002 with €223.5 million of commitments.