IHG has agreed to acquire Kimpton Hotels & Restaurants for € 344.7 mln in cash. Kimpton is the world’s largest independent boutique hotel operator and a sophisticated food and beverage operator. Kimpton is a fully asset-light business that manages 62 hotels in the most attractive cities and resorts in the US with a further 16 hotels in the pipeline. It operates 71 hotel-based destination restaurants and bars.
The acquisition makes IHG the clear market leader in the boutique segment, the fastest growing segment in the industry. Highly complementary with IHG’s Hotel Indigo and EVEN Hotels brands; creates a leading boutique and lifestyle hotel business, with over 200 open and pipeline hotels across 19 countries.
Significant opportunities identified for IHG to accelerate the growth of the Kimpton brand within the US and to launch it globally. Compelling financial rationale with Kimpton EBITDA expected to double by the end of 2017. The transaction will be earnings enhancing in its first full year and achieve returns above IHG’s cost of capital by year three.
Richard Solomons, Chief Executive Officer of IHG, commented: “Kimpton is a well-established and highly successful business that has built an industry leading position in the US. It has created a portfolio of world-class hotels and destination restaurants, and the distinctive and innovative Kimpton brand will fit perfectly into the IHG brand family. Adding Kimpton to our portfolio of preferred brands creates the world’s largest boutique hotel business.
The acquisition is another step in IHG’s well-established asset-light strategy of investing in high-quality growth, building on a strong track record of developing iconic global brands. We will use our scale, network of owner relationships, and powerful digital platforms to accelerate Kimpton’s growth both within the US and internationally.