Blackstone (NYSE:BX) has inked a deal to buy the underperforming Motel 6 chain from Accor for $1.9 billion as the French hotel company continues to cut debt and turn its focus from the U.S. to faster-growing emerging markets.
The network includes the iconic North American brand and Studio 6, an extended-stay economy chain. Together, the deal comprises 1,102 hotels and 107,347 rooms in the U.S. and Canada.
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The private equity firm is known for strategic buys in the real estate and lodging industries. In 2007, Blackstone acquired Hilton Hotels for $26 billion in what marked the biggest leveraged buyout of a hotel ever.
“Although Motel 6 will be operated on a stand-alone basis, similar to other lodging investments we have made on behalf of our investors, we plan to invest significant capital in the Company’s properties and to accelerate the expansion of the franchise base,” Blackstone’s global head of real estate, Jonathan Gray, said in a statement.
The sale follows an announcement in September 2011 that Accor planned to reduce capital employed in the Motel 6 and Studio 6 hotel chains and a commitment to expand into high-growth emerging markets.
Accor CEO Denis Hennequin said the deal allows the hotel company to tap the potential in the Asia Pacific region, which the Global Business Travel Association predicts will surpass the U.S. as a business travel destination by 2015, as well as in Latin America and Europe.
The tighter portfolio will help Accor reduce net debt by about 330 million euros and its fixed-lease commitments by 525 million euros, the company said in a statement.
The transaction is scheduled to close in October 2012, subject to the unwinding of leases and customary closing conditions.