Eight Mint Hotel properties sold as part of one of the largest hotel deals in Europe for four years are to join the Hilton Worldwide portfolio.
Private equity company the Blackstone Group - the owner of Hilton Worldwide - has bought Mint Hotels for a reported £600m.
David Orr (pictured), chief executive and one of the founders of Mint Hotel in 1995 with his father Sandy Orr and Donald MacDonald, had announced earlier this year that the group was looking for a new financial partner to grow the business into key European cities, but a sale was not the expected outcome.
The company was carrying debt of £417m, which largely stemmed from the development of two of Europe's largest hotel openings in the past year - the 583-bedroom Mint Hotel Tower of London and the 553-bedroom Mint Hotel Amsterdam.
The Orrs and MacDonald have left the group as Blackstone considers which brands should be attached to each of the eight hotels - two in London and one each in Bristol, Glasgow, Birmingham, Manchester, Leeds and Amsterdam. It is believed that the full-service DoubleTree by Hilton and the mid-market Hilton Garden Inn brands are the most likely names to be attached to the hotels.
David Orr said that after nearly 16 years building up Mint, the transaction gave the business a new future.
"In Blackstone, the business now has a global investor with a strong and expansive track record in the hospitality sector," he said. "We feel confident that they will continue to manage the hotels in a manner that is true to its business identity. We wish the new managers every success with the business and are hugely proud to have built it up to the position it now is in."
In 1998, the co-founders of the business had agreed a financial joint venture with Uberior Ventures, the private investment group operated by the Lloyds Banking Group.
Nigel Moss, managing director of Uberior Ventures, said: "For us, this large-scale transaction marks a great outcome for stakeholders reflecting a highly successful and market changing roll-out strategy."
The company, which employs 1,500 staff, was rebranded from City Inn to Mint Hotel last year to reflect the fresh thinking and contemporary image of the chain.
The two new hotels in London and Amsterdam are performing well, with the Tower of London property reporting regular mid-week occupancies of 95%. The company was on target to achieve its budgeted turnover of £104m for the year ending March 2012.
FINANCIAL CLIMATE IS CLOSING IN
Opening substantial hotels in the City of London (December 2010) and Amsterdam (May 2011) almost doubled the portfolio of Mint Hotel from 1,647 to 2,783 bedrooms. The cost, however, at £300m, plunged the group into heavy debt.
Since the start of the recession, financial backing for hotel expansion has been harder to come by. Hotel analyst Melvyn Gold said that because of the highly leveraged business, the Lloyds Banking Group had probably been the driving force in the sale of the company. "I assume the management team had no real choice in the matter," he said.
"Mint Hotel has done a very good job in developing good hotels, but the financial environment has caught up with them.
"For Hilton, the hotels are a good fit for their portfolio and will help their plans to grow two of their newer brands in Europe."
As hotel companies have moved away from owning the bricks and mortar and concentrating on management, Mint Hotel stood out for continuing to both develop and manage its properties. Earlier this year, David Orr said: "We like to be responsible for everything as it allows us to have a strong connection with the customer."
Over the past decade and a half, the group made its mark by establishing well-run, carefully designed hotels with a strong emphasis on natural light and orientation, with destination restaurants and rooftop bars dubbed Skylounges.
In 2004, the then-named City Inn Westminster won the Catey for Hotel of the Year - Group.
By Janet Harmer
E-mail your comments to Janet Harmer here.
If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk
Looking for a new job? Find your next job here with Caterersearch.com jobs
Blogs on Caterersearch.com
Catch up with more news and gossip on all Caterer's blogs
For the latest hospitality news, sign up for our E-newsletters