Leisure sector deals ‘unaffected’ by financial markets turmoil
Mergers and acquisitions in the hotel and leisure sector have contributed £4 billion in “deal flow” every three months, according to a new study.
Over the last three years, the UK sector has increased from 20 deals a quarter to 40.
The Deal Drivers UK report by PKF Accountants and business advisers found that the UK share of hotel and leisure deals in Western Europe was the largest in terms of both deal volume and value – 42% and 80% respectively in the first half of 2007.
The top end was dominated by two cross-border buys of UK travel companies, both by German bidders. The first was the £1.5 billion buy of MyTravel in February and in March TUI AG bought First Choice Holidays for £1.8 billion.
But the majority of the deal volume came from the small and mid market segment.
Private equity remains important across both the large and mid cap areas, the study shows.
In the hotel sector, the largest private equity buyout in the first half of 2007 was the £440 million MBO of Park Resort, backed by US private equity firm GI Partner.
Robert Barnard, partner for Hotel Consultancy Services at PKF, said: “The data in this report shows M&A activity within the hotel and leisure industries to be a very healthy part of the overall UK figures.
“Hotel sector activity looks to be continuing strongly, indeed July saw Blackstone Group’s acquisition of Hilton Hotels Corporation for $26 billion (£12.8bn). And in the mid market, Peel Hotels sold its Avon Gorge Hotel in Bristol to an unnamed bidder for £15.5 million in August.
“So the summer’s turmoil in the financial markets has so far not had a major effect on the sector.”
by Phil Davies
Phil Davies
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