Hotelier Sam Nazarian has a new partner from across the pond.
Paris-based AccorHotels plans to buy a 50 percent stake in Nazarian’s SBE Entertainment Group for $125 million, according to Hotel Business. Nazarian would continue to own the other 50 percent of the company and also run the company as CEO. AccorHotel’s stake was held in part by Cain International.
AccorHotels is using the merger as a means to expand in U.S. cities, including Miami, L.A. and Las Vegas, where Nazarian also runs hotels. It currently has one hotel in Miami, three in L.A., and four in New York.
AccorHotels also plans to invest $194 million in a new preferred debt instrument to redeem all existing preferred units, bringing its total investment in SBE to $319 million, according to the trade paper. The French firm said that Nazarian’s existing management team will still manage SBE properties.
Nazarian got his start running nightclubs in Los Angeles. SBE now operates around 20 properties around the world, including seven in Miami, two in Los Angeles, and three in New York. SBE, with headquarters in New York and L.A., is privately held and has 20 hotel and residential properties in the pipeline, according to Hotel Business. It greatly expanded its portfolio when it acquired the Morgans Hotel Group in 2016.
AccorHotels wasn’t the first potential partner to come knocking on SBE’s door. The firm was in “advanced discussions” to merge with the Hakkasan Group last year. [Hotel Business] – Dennis Lynch