Rothschild has been appointed to sell the Moran Hotels chain for a price thought be in the region of €300 million.
According to EuroProperty, the pan-European property investment magazine, the investment bank was appointed to sell the business just recently.
The Moran group has 10 hotels in Ireland and Britain with 2,627 rooms, trading under its Bewley's or Moran brands. It is understood that Avi Goldberg, a managing director of Rothschild, is working on the sale of the business. He did not return calls for comment yesterday.
Moran Hotels completed a financial restructuring last year which saw €125 million injected into the company and its net debt reduced from €695 million to €205 million.
In return, its lenders – AIB, Bank of Ireland and US hedge fund Canyon Capital – did a debt for equity swap. Canyon bought into the hotel group by acquiring €250 million worth of its borrowings at a discount reported to be 70 per cent.
Expansion trail
Performance of the hotel chain has improved with the economic recovery. In July
Pat Power
, group finance director with the company, said sales at the group rose by €5 million year on year in the first six months of 2013.
He said sales were up 6 per cent and room occupancy was up 4 per cent. Its room rate was up 7.8 per cent and revenue per available room was up 12.5 per cent.
At the same time demand for Irish-based hotels has improved among international and domestic investors.
Both Brehon Capital Partners and the Dalata Group have been on the expansion trail, but the scale of the Moran group would make it a larger deal than either has done to date.
The strong cashflow generated by the company will make it attractive to private equity bidders who might seek to combine it with existing chains.
Earnings of €26m
Accounts for the group state it produced earnings before interest, tax, depreciation and amortisation of €26 million in the 12 months to the end of January this year.
Moran Hotels was founded by businessman Tom Moran, who is now a minority shareholder in the business.
It has hotels in Dublin, Cork, London, Manchester and Leeds and employs about 1,000 people. Mr Moran did not return calls for comment.