Travelodge Acquires 52 Properties
Budget hotel operator Travelodge has continued its aggressive expansion program with the acquisition of 52 properties from Mitchells & Butlers.
The deal for the Innkeeper's Lodges will boost Travelodge's estate to 452 hotels, while increasing its room stock by 2,000 to more than 30,000 across the UK, Ireland and Spain.
Earlier this year Travelodge installed a new management team with the express remit of maximizing growth ahead of a potential sale. In a statement Travelodge confirmed it will seek to retain all 430 staff from Mitchells & Butlers and will look to recruit a further 115 positions. These include 25 hotel manager roles and 90 hotel staff.
Travelodge's executive chairman, Grant Hearn said: “This innovative deal represents the whole of last years growth in one move and highlights Travelodge's excellent position coming out of the recession. I believe this deal also signifies a great move for Mitchells Butlers as they refocus on value and growth from their core pub brands. We are very excited to be part of such a ground breaking deal.”
Under the terms of the deal Travelodge has signed a 25-year lease on the properties and will embark on a £10 million investment program to convert the hotels to bring them in line with the Travelodge brand.
Mitchells & Butlers said net proceeds generated from the deal - expected to total £88 million - will be used to reduce debt and to fund capital investment opportunities in the company's growth brands.
Commenting on the transaction chief executive, Adam Fowle, said: “This transaction is in line with our strategy of disposing of the non-core assets and focusing the business on expanding the number of sites of our market leading restaurant and pub brands which have significant growth potential.”
The deal is expected to be finalized on August 10th 2010.
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