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Pandox acquires Norgani Hotels AS

24 Aug, 2010, 08:15

PRESS RELEASE, 24 August 2010

Pandox acquires Norgani Hotels AS

- establish Europe's leading hotel property company

Swedish-based hotel property company Pandox AB has reached an agreement, with financial support from its owners, to acquire Norgani Hotels AS, Norway. The acquisition price is NOK 8.3 bn. (EUR 1 bn.) 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 specialised 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 EUR 2.3 bn. Estimated rental revenues are EUR 185 m pro forma with cash flow of EUR 75 m.

Pandox's hotel property portfolio will include 119 hotel properties with 24,000 rooms, nine operational businesses and one conference centre (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 centres. The hotel offerings are mainly in the profitable upper-middle and premium segments.

Geographical diversity

Pandox will be running its business in ten 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 EUR 125 m.

Lease structures

The majority of revenues, 88%, come from variable lease agreements relating to hotel operator sales, while the remaining 12% comes from own operations.

Leases are structured so Pandox benefits from market growth and development work in hotels, while risk are limited through guarantee levels.

Multi-brand portfolio

The hotels in Pandox portfolio will be marketed by 15 well-known brands and a number of independent web-based distribution channels. The largest will be Scandic, with 45%. Choice, with its three brands of Clarion, Quality and Comfort, represents just over 13% of revenues, while the Hilton share is nearly 12%. Other brands include InterContinental, Radisson Blu, Crowne Plaza, Hyatt, Holiday Inn, Elite, First, Rica, Ibis and Best Western.

The multi-brand portfolio will continue to develop Pandox's unique network and skills in the hotel sector.

Pandox own hotel operations

Pandox's business model is based on creating the best local conditions, hotel by hotel. This means that some hotels are operated by Pandox, considered a natural business segment for a specialised hotel property company. At present, Pandox operates nine hotels located in Belgium, Germany, Canada and the Bahamas. This operation has estimated sales of EUR 115 m this year, providing EBITDA of over EUR 20 m.

For more information, please contact:

Anders Nissen
CEO, Pandox AB
+46 (0)708 46 02 02
anders.nissen@pandox.se

Liia Nõu
CFO, Pandox AB
+46 (0)70 237 44 04
liia.nou@pandox.se

Pandox is the leading player in the hotel property market in Europe regarding geographic area, number of hotels and brands. The portfolio consists of 119 hotels, nine operational businesses, more than 24,000 rooms located in Sweden, Finland, Norway, Denmark, Germany, Belgium, the UK, Switzerland, the Bahamas and Canada. Pandox's hotels operate through differing business structures under well-recognised brands such as Scandic, Hilton, InterContinental, Hyatt, Radisson Blu, Crowne Plaza, Holiday Inn, Clarion, Quality, Elite, First, Rica, Ibis, Best Western or through independent distribution channels. Pandox is owned by the Norwegian companies

Pandox hotel portfolio - August 2010

Sorted by country.

CountryHotelPartnerCityNo. rooms
BahamasPelican Bay at LucayaPrivateBahamas184
BelgiumCrowne Plaza AntwerpenInterContinental HotelsAntwerp264
BelgiumCrowne Plaza Brussels CityInterContinental HotelsBrussels354
BelgiumHilton Brussels CityHiltonBrussels283
BelgiumHoliday Inn Brussels AirportInterContinental HotelsBrussels310
BelgiumHotel Bloom!PandoxBrussels305
BelgiumScandic Hotel AntwerpenScandicAntwerp204
BelgiumScandic Hotel Grand PlaceScandicBrussels100
CanadaHyatt Regency MontrealHyattMontreal605
CanadaIntercontinental MontrealInterContinental HotelsMontreal357
DenmarkClarion Collection Hotel 27ChoiceCopenhagen200
DenmarkClarion Collection Hotel Mayfair Choice Copenhagen 105
DenmarkComfort Hotel Europa Choice Copenhagen 230
DenmarkComfort Hotel Excelsior Choice Copenhagen 99
DenmarkScandic Hotel CopenhagenScandicCopenhagen484
FinlandAirport Hotel Bonus Inn Private Vantaa 211
FinlandComfort Hotel Pilotti Private Vantaa 112
FinlandHilton Helsinki Kalastajatorppa Scandic/Hilton  Helsinki 238
FinlandHilton Helsinki Strand Scandic/Hilton Helsinki 192
FinlandHotel Korpilampi Private Espoo 150
FinlandRantasipi Imatran Valtionhotelli Restel Imatra 135
FinlandScandic Continental Scandic Helsinki 512
FinlandScandic Espoo Scandic Espoo 96
FinlandScandic Grand Marina Scandic Helsinki 462
FinlandScandic Jyväskylä Scandic Jyväskylä 150
FinlandScandic Kajanus Scandic Kajaani 191
FinlandScandic Kuopio Scandic Kuopio 137
FinlandScandic Luosto Scandic Luosto 59
FinlandScandic Rosendahl Scandic Tampere 213
FinlandScandic Tampere City Scandic Tampere 263
GermanyHilton BremenHiltonBremen235
GermanyHilton DortmundHiltonDortmund190
GermanyHotel Berlin, BerlinPandoxBerlin701
GermanyScandic LübeckScandicLübeck158
NorwayClarion Collection Arcticus Choice Harstad 75
NorwayClarion Collection Hotel Bastion Choice Oslo 99
NorwayComfort Hotel Børsparken Choice Oslo 198
NorwayComfort Hotel Holberg Choice Bergen 140
NorwayQuality Hotel & Resort Fagernes Choice Fagernes 139
NorwayQuality Hotel & Resort Hafjell Choice Øyer 210
NorwayQuality Hotel & Resort Kristiansand Choice Kristiansand 210
NorwayQuality Hotel Alexandra Choice Molde 163
NorwayRadisson Blu Hotel Bodø Rezidor Bodø 191
NorwayRadisson Blu Lillehammer Hotel Private Lillehammer 303
NorwayRica Hotel Bodø Rica Bodø 113
NorwayRica Hotell Hamar Rica Hamar 176
NorwayScandic Bergen Airport ScandicBergen 197
NorwayScandic KNA Scandic Oslo 189
SwedenBest Western Mora Hotell & Spa Private Mora 135
SwedenBest Western Royal Corner Private Växjö 158
SwedenClarion Grand Hotel HelsingborgChoiceHelsingborg164
SwedenClarion Grand Hotel ÖstersundChoiceÖstersund176
SwedenClarion Plaza Hotel KarlstadChoiceKarlstad131
SwedenElite Park Avenue GöteborgElite HotelsGothenburg317
SwedenElite Stora Hotellet JönköpingElite HotelsJönköping135
SwedenFirst Hotel Grand BoråsFirst HotelsBorås158
SwedenFirst Hotel Linköping First HotelsLinköping  133
SwedenFirst Hotel Mårtenson First HotelsHalmstad 103
SwedenFirst Hotel Royal Star Private Stockholm 103
SwedenHilton Stockholm SlussenHiltonStockholm289
SwedenIbis Stockholm Syd Accor Stockholm 190
SwedenMr Chip, KistaPrivateStockholm150
SwedenQuality Hotel Ekoxen Choice Linköping  190
SwedenQuality Hotel Grand Kristianstad Choice Kristianstad 149
SwedenQuality Hotel Luleå Choice Luleå 209
SwedenQuality Hotel NackaChoiceStockholm164
SwedenQuality Hotel Park SödertäljeChoiceSödertälje157
SwedenQuality Hotel Prins Phillip Choice Stockholm 201
SwedenQuality Hotel Prisma ChoiceSkövde107
SwedenQuality Hotel Winn, Göteborg Choice Gothenburg121
SwedenRadisson Blu ArlandiaRezidorStockholm335
SwedenRadisson Blu Hotel, Linkoping Rezidor Linköping 91
SwedenRadisson Blu MalmöRezidorMalmö229
SwedenScandic Hasselbacken  Scandic Stockholm 112
SwedenScandic Hotel Alvik Scandic Stockholm 325
SwedenScandic Hotel Backadal Scandic Gothenburg   232
SwedenScandic Hotel BillingenScandicSkövde107
SwedenScandic Hotel Bollnäs Scandic Bollnäs 111
SwedenScandic Hotel Bromma Scandic Stockholm 144
SwedenScandic Hotel Crown GöteborgScandicGothenburg338
SwedenScandic Hotel Elmia Scandic Jönköping 220
SwedenScandic Hotel Ferrum  Scandic Kiruna  170
SwedenScandic Hotel Gävle Väst Scandic Gävle 201
SwedenScandic Hotel HallandiaScandicHalmstad154
SwedenScandic Hotel Helsingborg Nord Scandic Helsingborg 237
SwedenScandic Hotel Järva KrogScandicStockholm215
SwedenScandic Hotel Kalmar Väst  Scandic Kalmar 148
SwedenScandic Hotel Klarälven Scandic Karlstad143
SwedenScandic Hotel KramerScandicMalmö113
SwedenScandic Hotel Kungens Kurva Scandic Stockholm 257
SwedenScandic Hotel LinköpingScandic Linköping150
SwedenScandic Hotel LuleåScandic Luleå159
SwedenScandic Hotel MalmenScandicStockholm327
SwedenScandic Hotel MölndalScandicGothenburg208
SwedenScandic Hotel Norrköping NordScandicNorrköping150
SwedenScandic Hotel ParkScandicStockholm201
SwedenScandic Hotel S:t JörgenScandicMalmö288
SwedenScandic Hotel SegevångScandicMalmö161
SwedenScandic Hotel Skogshöjd SödertäljeScandicSödertälje225
SwedenScandic Hotel Star LundScandicLund196
SwedenScandic Hotel Star SollentunaScandicStockholm269
SwedenScandic Hotel Sundsvall NordScandic Sundsvall 159
SwedenScandic Hotel Södertälje ScandicSödertälje131
SwedenScandic Hotel Trollhättan SwaniaScandicTrollhättan198
SwedenScandic Hotel Umeå SydScandicUmeå162
SwedenScandic Hotel Uplandia Scandic Uppsala 133
SwedenScandic Hotel Upplands-VäsbyScandicStockholm150
SwedenScandic Hotel Uppsala NordScandicUppsala184
SwedenScandic Hotel WinnScandicKarlstad199
SwedenScandic Hotel Västerås Scandic Västerås 174
SwedenScandic Hotel VäxjöScandicVäxjö123
SwedenScandic Hotel ÖrebroScandicÖrebro221
SwedenScandic Hotel Örebro Väst Scandic Örebro 204
SwedenScandic Hotel Östersund Scandic Östersund 129
SwedenScandic Plaza BoråsScandicBorås135
SwedenStadshotellet Princess SandvikenPrivateSandviken84
SwedenVildmarkshotellet KolmårdenPrivateNorrköping213
SwitzerlandRadisson Blu BaselRezidorBasel205
UKHilton DocklandsHiltonLondon365
     
 119
HOTELS
   23 954 ROOMS
FinlandMarina Congress Center
Linked to Scandic Grand Marina
ScandicHelsinki