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AccorHotels to Buy Half of SBE Entertainment for $319 Million

Paris-Based Accor to Increase U.S. Presence with Stake in LA-Based Hospitality Company
June 29, 2018
AccorHotels will buy a 50 percent stake in Sam Nazarian's Los Angeles-based SBE Entertainment Group in the latest example of the French group's acquisition spree in the upscale hotel segment.

Paris-based AccorHotels, increasing its foothold in the U.S. lodging market, will acquire the 50% of SBE's common equity held by Cain International for $125 million, and will invest $194 million in a new debt instrument for a total investment of $319 million.

Nazarian will continue to own the remaining 50% of SBE, which includes such well-known brands as SLS Hotel & Residences, Delano, Mondrian and Hyde in New York City, Miami, Las Vegas and global resort destinations as the Bahamas, Rio de Janeiro and Dubai.

The flashy Iran-born Nazarian, who founded SBE in 2002 and launched a string of trendy nightclubs, restaurants and hotels, now employs 7,000 people worldwide. SBE's properties include Delano South Beach in Miami, SLS Baha Mar in the Bahamas, Mondrian Doha in Qatar, Mondrian Park Avenue in New York City and the newly opened 57-story SLS LUX Brickell in Miami.

The long-term investment will allow SBE to take advantage of AccorHotels' global hospitality platform "while remaining an independent luxury lifestyle operator," the company said in a statement. SBE, with backing from Cain Hoy and Ron Burkle’s The Yucaipa Companies, acquired Morgans Hotel Group in 2016 for a reported $800 million.

SBE said it would operate 25 hotels comprising 7,498 rooms by the end of 2018, mostly in North America. The company has 20 hotels and residences around the world in its development pipeline and has sold 1,500 branded residential units valued at $2 billion, with over 2,500 units valued at $2.5 billion in its pipeline.
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