Pandox acquires Norgani Hotels AS (SE/NO)

Swedish-based hotel property company Pandox AB has reached an agreement, with financial support from its owners, to acquire Norgani Hotels AS, Norway.

Exterior Scandic Upplands Vasby

Pandox's hotel property portfolio will include 119 hotel properties with 24,000 rooms.

The acquisition price is NOK 8.3 bln. (€1 bln.) and is conditional on funding and the approval of competition regulators. Norgani's portfolio consists of 73 hotel properties and one conference center (Helsinki) located in Sweden, Finland, Norway and Denmark, with a total of 12,900 rooms.

After this acquisition, Pandox will be the leading specialized hotel property company in Europe in terms of geographical diversity, number of hotels and brands.

Pandox's portfolio
The value of Pandox's hotel property portfolio, will after the after acquisition, be €2.3 bln. Estimated rental revenues are €185 mln. pro forma with cash flow of €75 mln.

Pandox's hotel property portfolio will include 119 hotel properties with 24,000 rooms, nine operational businesses and one conference center (Helsinki). There will be a total of 15 brands in the portfolio.

The majority of hotels are located in growing and dynamic city locations, near airports or close to exhibition and conference centers. The hotel offerings are mainly in the profitable upper-middle and premium segments.

Geographical diversity
Pandox will be running its business in 10 countries: Sweden, Finland, Norway, Denmark, Germany, Belgium, Switzerland, the UK, Canada and the Bahamas. The company will be active in a total of 60 locations.

Revenues will be sourced as follows, Sweden with 49%, Finland with 13%, Norway with 11% and Denmark with 6%. International revenues are mainly sourced from Belgium, with 7.5%, Germany with 6%-plus, Canada with 3%, and the UK, 2%.

There is a good overall balance in the revenue structure, with 53% sourced from locations that largely have stable domestic demand such as Sweden's regional and university cities. The remaining 47% are sourced from international locations that have greater dynamics and potential.

The Stockholm region will be the largest city with ownership of 20 hotels, including the Hilton Stockholm Slussen, the Scandic Malmen, Hasselbacken and Park, and the Radisson Blu Arlandia. Other major locations include Helsinki, Copenhagen and Gothenburg.

The primary locations of revenue sources outside Scandinavia are Brussels, Montréal, Berlin and London.

"Pandox continues to play an active role in restructuring the hotel property market. We feel humbled and inspired to get the opportunity to establish ourselves as one of the big players in Europe," commented Anders Nissen, CEO of Pandox.

"Getting started on development work, hotel by hotel, is a priority and we're looking forward to strengthening our contact interfaces with old and new partners."

Several of the hotels in Norgani's portfolio need active measures such as investment, revised lease structures and product development. Pandox estimates the cost of this work at €125 mln.

Lease st

Related News