UK buy firm Permira’s Principal Hotels has bought Hayley Conference Centres from its founding management team originally appointed by 3i.
Permira paid £358 million (€528 million; $711 million) for Hayley’s eight “stately home” style conference centres taking into account debt of about £200 million. The centres are intended to complement the 4 to 5 star Principal Hotels business.
3i had originally backed Hayley in 1991 and reinvested £41 million for a 45.8% stake in September 2005. In 3i’s annual report this year its stake had risen to approximately £70 million in value. 3i also stated that it had increased profit by 50% during its investment.
The Hayley management’s decision to sell their stake comes as the company expands internationally with a development near Paris.
Martin Clarke, a Permira partner, said that Hayley will be an add-on, not a stand-alone acquisition to create a leading luxury UK hotel group with outlets in Europe. He added that the expansion plans are not as dramatic as with Travelodge, which Permira grew from 13,000 to 20,000 rooms between 2003 and 2006, due to the luxury nature of the hotels.
The combined group will have 17 sites with a total of 3,000 bedrooms. The 400 meeting rooms across the two businesses have the capacity to serve in excess of 20,000 daily conference delegates.