One Hotels & Resorts (OHR) has acquired the remaining 35% stake in the European affordable design hotel chain Motel One Group from Proprium Capital Partners, a real estate private equity company.
Proprium, which has been a minority shareholder in Motel One for the past 17 years, sold its minority stake to OHR for €1.25bn ($1.35bn).
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The private equity company originally bought the 35% stake in Motel One in 2007, as part of an investment made during the hotel chain’s last capital increase. Later in 2019, Proprium recapitalised the investment.
OHR now has full ownership of the hotel chain.
The transaction values Motel One at €4.1bn, with 2023 earnings before interest, taxes, depreciation, and amortisation valuation multiple of approximately 14 times.
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Besides, the sale price suggests a return on invested equity for the original investors of over 20 times.
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By GlobalDataMotel One was founded in in 2000 by Dieter Müller. The hotel chain particularly focuses on offering quality stays in prime city centre locations, and now operates 94 hotels with 26,470 rooms across Germany and internationally.
With the current pipeline, growth is projected to reach 117 properties with over 32,000 rooms in 56 cities.
The recent introduction of the new lifestyle brand, called ‘The Cloud One Hotels’, further signifies a new growth phase for Motel One. This includes the opening of the first hotel under the new brand in New York.
Morgan Stanley served as the financial adviser for the deal while Freshfields and Hengeler Mueller were appointed as the legal advisers to Proprium and OHR, respectively.
Proprium Europe partner and head Philipp Westermann said: “While the sale of our stake in Motel One will generate very attractive returns for our investors, we leave Motel One very well positioned with an enormous potential for future growth.
“The investment in Motel One exemplifies Proprium’s commitment to platform investing, aimed at delivering outsized private equity returns within the real estate industry.”
Westermann led the transaction for Proprium and has also served on the board of Motel One over the years.
