IHG® announces the acquisition of Six Senses Hotels Resorts Spas
Denham, United Kingdom, 2019-Feb-14 — /Travel PR News/ — InterContinental Hotels Group (IHG®) has today (13 FEBRUARY 2019) announced the acquisition of Six Senses Hotels Resorts Spas, one of the world’s leading operators of luxury hotels, resorts and spas. The $300 million cash acquisition from Pegasus Capital Advisors includes all of Six Senses’ brands and operating companies and does not include any real estate assets.
Six Senses currently manages 16 hotels and resorts, with 18 management contracts signed into its pipeline, and more than 50 further deals under active discussion. With properties in locations such as the Maldives, the Seychelles, Yao Noi in Thailand, Zighy Bay in Oman, and Portugal’s Douro Valley, the addition of Six Senses’ award-winning estate and high-quality development pipeline will further round out IHG’s position in the luxury segment.
At Six Senses’ core is a commitment to guest rejuvenation and reconnection, with an expert focus on wellness and sustainability. The acquisition extends IHG’s reach to a community of affluent travellers and new owners and provides instant entry to some of the world’s most sought-after locations.
Six Senses will sit at the top of IHG’s luxury portfolio, complementing the world’s largest luxury hotel brand, InterContinental Hotels & Resorts; the recently acquired and repositioned Regent Hotels & Resorts; and Kimpton Hotels & Restaurants, for which IHG has secured a presence in 14 countries, since its acquisition of the brand in 2015. Today’s acquisition of Six Senses takes IHG’s portfolio of open and pipeline luxury hotels to 400 hotels (108,000 rooms) globally.
By combining IHG’s scale, systems and operational excellence with Six Senses’ luxury, resort and spa expertise, IHG sees the potential to grow the Six Senses estate to more than 60 properties globally over the next 10 years. This includes bringing Six Senses to important urban markets, with a property already under construction in West Chelsea, Manhattan, New York City.
Keith Barr, Chief Executive Officer, IHG, commented: “Six Senses is an outstanding brand in the top-tier of luxury and one we’ve admired for some time. You only have to look at its iconic hotels and resorts to see how this acquisition will further round out our luxury offer. With a focus on wellness and sustainability, Six Senses has been voted the world’s top hotel brand for the past two years, which is testament to its impressive management team who bring deep experience to IHG’s luxury operations.
“Six Senses’ attractive development pipeline provides us with a platform for high quality growth. With the power of the IHG enterprise, we believe we can expand Six Senses to more than 60 properties globally over the next decade. This acquisition continues the progress we’ve made against the strategic initiatives we outlined a year ago, which included a commitment to adding new brands in the fast-growing $60 billion luxury segment.”
Neil Jacobs, Chief Executive Officer, Six Senses Hotels Resorts Spas, commented: “An outstanding business has been built over the past 20 years, and a respected portfolio of hotels and resorts, with wellness and sustainability at their heart. This distinct proposition and the popularity of our award-winning estate, combined with IHG’s scale, systems and expertise gives us the opportunity to accelerate Six Senses’ global growth.”
David Cogut, Principal, Pegasus Capital Advisors, commented: “Six Senses fit well with our core themes of investing in sustainability and wellness with a focus on ESG (Environmental, Social and Governance) integration, and we’re proud of the work we have done to build it into one of the world’s best luxury hotel brands. Since acquiring the brand in 2012, we have taken the Six Senses experience to some of the world’s most select locations. IHG shares many of our values and will protect what’s special about the brand as it drives Six Senses’ next phase of growth.”
Transaction overview
- IHG has agreed to acquire Six Senses Hotels Resorts Spas and its management business for $300 million in cash.
- Six Senses is an asset-light business. It manages 16 hotels and resorts (1,347 rooms), and there are a further 18 management contracts signed into its development pipeline. The open hotels include two properties for the upscale resort brand, Evason. With a further 50 deals under active discussion, IHG expects to accelerate Six Senses’ growth globally to more than 60 hotels over the next 10 years.
- The acquisition includes the entirety of Six Senses’ brands and operating companies and does not include any real estate assets. It includes Six Senses’ spa operations, which are core to the brand’s luxury and wellness positioning. Six Senses operates 37 spas in total under the Six Senses and LivNordic brand names, and also provides spa consultancy services. The Six Senses management will remain in place.
- Six Senses currently generates fee revenues of more than $13 million. The acquisition is expected to be EBITDA breakeven in year two and to generate a return approximately equal to its cost of capital by year four.
- For tax purposes, the transaction constitutes an asset sale for the purchaser, and as such IHG will be entitled to amortise the assets acquired. It is anticipated that the relief associated with this amortisation will reduce IHG’s future cash taxes by approximately $75 million.
About IHG®
IHG® (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including InterContinental® Hotels & Resorts, Kimpton®Hotels & Restaurants, Hotel Indigo®, EVEN® Hotels, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Holiday Inn®, Holiday Inn Express®, Holiday Inn Club Vacations®,Holiday Inn Resort®, avid™ hotels, Staybridge Suites® and Candlewood Suites®.
IHG franchises, leases, manages or owns nearly 5,400 hotels and 800,000 guest rooms in almost 100 countries, with more than 1,700 hotels in its development pipeline. IHG also manages IHG® Rewards Club, our global loyalty programme, which has more than 100 million enrolled members.
InterContinental Hotels Group PLC is the Group’s holding company and is incorporated in Great Britain and registered in England and Wales. More than 375,000 people work across IHG’s hotels and corporate offices globally.
Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihgplc.com/media and follow us on social media at: www.twitter.com/ihg, www.facebook.com/ihg and www.youtube.com/ihgplc.
For further information please contact:
Mark Debenham
mark.debenham@ihg.com
+44 (0) 1895 512 097
+44 (0) 7527 424 046
Source: IHG
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