PAI scores hat trick with Groupe B&B Hotels buy

The European firm announced its third transaction in a week with its agreement to acquire Groupe B&B Hotels from Carlyle.

Paris-based PAI Partners has announced its third transaction in a week with its acquisition of Groupe B&B Hotels from The Carlyle Group and Montifiore Investment. The transaction value is understood to be about €800 million.

B&B operates a chain of 343 budget hotels across Europe and Morocco, with the majority in France, targeted at business and leisure travellers. PAI intends to accelerate opening hotels in Europe and beyond, it said.

The acquisition will complete upon approval by the French employee works councils.

PAI will make the investment through PAI Europe VI, a €3.3 billion vehicle that closed in March with six investments already made.

The fund has made eight investments to date, including acquiring a 40 percent stake in Spanish call centre company Konecta and a majority stake in Customs Sensors and Technology, which it acquired in 2014 with Carlyle.

Carlyle’s investment in B&B Hotels was made principally through Carlyle Europe Partners III, which over the past 12 months has also exited companies including Spanish telecoms company Telecable, Dutch telecoms company Altice, Axalta, Multi Packaging Solutions and RAC to CVC Capital Partners.

Its successor fund, CEP IV, had made seven investments as of mid-December, including in Dutch lingerie business Hunkemöller, which it agreed last week to acquire from PAI. PAI realised a 2.3x return on the sale of its controlling stake. It was originally purchased in 2011 for €265 million through PAI Europe V, a 2007 vintage vehicle that closed on €2.7 billion, as reported by Private Equity International.

PAI announced earlier this week that it has also agreed to sell plastic packaging manufacturer Global Closure Systems to London-listed plastic products company RPC Group pending works council, competition clearance and RPC shareholder approval. The transaction is valued at €650 million. The company operates globally with 21 manufacturing sites in 13 countries and reported sales of €603 million and EBITDA of €95 billion over the last 12 months until September.

PAI’s investment was made through its PAI Europe IV fund, a €2.7 billion, 2005-vintage vehicle, and represents its sixth exit.