As it stands, the Red Roof Inn portfolio contains 335 properties; however, nine of those properties will be rebranded as Motel 6 prior to the closing of the sale. The Red Roof portfolio is concentrated mostly on the East Coast and Midwest of the US.
According to an Accor statement, the deal will be based on 11.2 times EBITDAR, which totaled $118 million excluding the rebranded Motel 6 properties. As a result of the deal, Accor will be able to reduce its adjusted net debt by $1.08 billion, of which $610 million will be added to the group's cash reserves.
Global Special Situations Group is part of New York City-based Citigroup Global Market Holdings, Inc. Westbridge is a partnership between Westmont Hospitality Group and several Canadian pension fund managers. Based in Paris, Accor operates in 100 countries and its hotel brands include Sofitel, Novotel, Mercure and Motel 6. Accor's financial advisor on the transaction was Bank of America.
The move positions Accor to focus on its Motel 6 portfolio, which has 928 hotels across North America, especially on the West Coast with 181 properties in California. "The United States is a key market for us," Accor CEO Gilles Pelisson says in a statement. "With the ambition of being the world leader in economy and budget hotels, Accor plans to step up development of Motel 6 by opening more than 200 units in the United States and Canada by 2010."
Accor has been busy lately. Last month the company revealed it was selling 91 hotels in Germany and the Netherlands, along with 12year variable rent leases on each of the hotels, for $1.14 billion to Moor Park Real Estate, as GlobeSt.com previously reported. In February, the hospitality company agreed to sell 30 hotels in the United Kingdom to Land Securities Group for $921.31 million, as GlobeSt.com also reported.
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