France’s Accor to Buy Half of SBE Entertainment Group

Date: June 2018

Location: Global

Name: SBE: Morgans, Delano, Mondrian, Disruptive Restaurant Group et al

No. of Keys: 7,498 plus 20 hotels in the pipeline

Seller: sbe Entertainment Group, headed up by Sam Nazarian, CEO,  brands include SLS, Delano, Mondrian, Hyde, The Originals (Sanderson, St. Martin Lane, Hudson, 10 Karakoy, Shore Club) and the Redbury Hotels.

Through its Disruptive Restaurant Group platform, sbe has created global award winning
culinary brands Katsuya, Umami Burger, Cleo, Leynia, Diez & Siez and Filia and
innovative entertainment brands including Hyde nightclub and dayclub, Nightingale, Privilege dayclub Black Orchid, S Bar, Skybar and the Doheny Room.

Landmark destinations in its portfolio include, Delano South Beach in Miami, SLS Baha Mar in the Bahamas, Mondrian Doha in Qatar, Hyde Bellagio in Las Vegas, Mondrian Park Avenue in New York City and the newly-opened 57 story SLS LUX Brickell in Miami. Upcoming opening includes Delano Rio de Janeiro, Delano Dubai at the Palm and Hyde Midtown in Miami.

Through this investment, sbe will accelerate its international growth with expansion into new
markets outside of the US, including priority growth markets in the Middle East and Latin
America. sbe’s pipeline includes projects in some of the most important global gateway
cities such as Atlanta, Chicago, Washington D.C., Dubai, Rio de Janeiro, Mexico City, Cancun,
Tokyo and Los Cabos.

By the end of 2018 sbe will operate 25 hotels, comprising 7,498 keys with a majority in North
America, 170 award winning restaurants and entertainment venues in global destinations as
well as new properties in the Middle East, Asia and Latin America.

It currently has a further 20 hotels and residences around the world in its pipeline, as well as 59 standalone restaurants and nightlife venues.

In addition, sbe has sold 1,500 branded residential units valued at $2 billion with over 2,500 units valued at $2.5 billion in its pipeline.

Jonathan Goldstein, Chief Executive of Cain International, commented: “Cain International
became partners to sbe in 2016 providing the investment required at that time to enable
the group to expand its footprint of some of the leading luxury lifestyle hospitality assets
in the world.

We are confident that sbe will continue to go from strength to strength with
its new partners, AccorHotels; we wish them every success in the future and are proud of
the role we have played in their exciting growth story.”

Founded in 2002 by Sam Nazarian, sbe is a leading lifestyle hospitality company that
develops, manages and operates award-winning global properties and brands.

Buyer: AccorHotels and sbe Entertainment Group have signed a Letter of Intent and entered into exclusive negotiations for AccorHotels to acquire a 50% stake in sbe, further illustrating AccorHotels’s strategy to expand its offering in the luxury lifestyle hospitality segment.

This partnership will combine the expertise and savoir-faire of the two groups; AccorHotels
will acquire the 50% of sbe’s common equity held in part by Cain International for
$125 million.

Sam Nazarian will continue to own the remaining 50% of sbe. In addition, AccorHotels will invest US$194 million in a new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain International. AccorHotels’ total investment in sbe will be US$319 million.

This long-term investment will allow sbe to leverage AccorHotels’ leading global hospitality
platform while remaining an independent luxury lifestyle operator.

Sbe will continue to be led by its Founder and CEO Sam Nazarian as well as its expert management team while retaining its global headquarters in New York.

The transaction is subject to regulatory approvals. It should be completed by July 31, 2018

Price: US$319m for 50%

Price per Key: US$85,089

THPT Comment: Must be Friday! Just this week, Accor dropped it’s option to buy a stake in Banyan Tree, so turned it’s attention to sbe….What’s on the cards for next week?

First Seen: Accor website