One More Thing:Having successfully built a chain of three-star hotels in Britain under the Jurys Inns brand, Pat McCann is now hoping to repeat the trick with his latest hotel venture.
McCann, a 38-year veteran of the hotel game, has invested €1 million in the consortium paying €41.5 million to buy 11 Quality Hotels and Comfort Inns in Ireland.
Both brands operate in the three-star market, and the consortium, which includes TVC Holdings and Davy private clients, is also putting up €3 million for development purposes.
The business plan, as outlined in a document circulated to Davy private clients, who are stumping up €20.5 million in equity, details the "significant market opportunity" in the three-star market in the UK.
"The promoters intend to roll out one to two new hotel properties per year over the next five years through building strategic relationships with key UK-based developers starting in 2009," the document says.
The consortium has pencilled in a net contribution from the UK of €4 million by 2012. This is based on the first of the properties being added to its portfolio in mid-2009 reaching "maintainable earnings" of €1 million by year three of operations.
As head of Jurys Doyle until 2006, McCann was a driving force behind the growth of the Jurys Inns business, which was sold recently to Quinlan Private for just shy of €1.2 billion.
Jurys Inns has 15 three-star hotels in the UK and another eight due to open over the next three years. Quinlan is expected to ramp up its roll-out in the coming years.
McCann has recruited Stephen McNally, the recently-departed head of the Jurys Inns business, to help him build his new business in the UK.
The hotel chain, which was acquired from Paddy Kelly, Frankie Whelehan and members of the McCormack family, is expected to achieve earnings before interest, tax, depreciation and amortisation of €2.5 million in 2007. This is expected to rise to €4.5 million in 2008 and to €11.5 million in 2012.
If McCann meets the targets, it is understood he will be given a 12 per cent share of the hotel business at the end of the five-year period. The promoters expect the business to be worth at least €100 million by then, valuing McCann's slice of the action at €12 million.
Even allowing for the repayment of whatever is left of the consortium's €15 million loan from Ulster Bank, McCann would be in line for a handsome return on his investment.
