Principal Hayley, the hotel group behind The George in Edinburgh and Glasgow’s Grand Central, has been sold to a US private equity firm in a deal believed to be worth £360 million.
Property specialist Starwood Capital said it was buying the group, which is a collection of 23 landmark city centre hotels and dedicated conference venues across Europe, as part of its expanding interest in the hotel sector.
The business was 30 per cent owned by Lloyds Banking Group, which was thought to be keen to sell as part of its ongoing divestment of non-core assets. The remaining shares were owned by the company’s management team, led by chief executive Tony Troy and chairman Roger Devlin.
Although financial details were not announced yesterday, Starwood is understood to have paid £360m for Principal – approximately the book value of the business and slightly below the £400m mooted when news of sale talks first surfaced in December.
Devlin said: “I believe it is a significant achievement in challenging market conditions to have delivered a fair exit multiple for stakeholders within a disciplined timeframe. This is the right deal for customers and employees alike.”
Although previous reports suggested Starwood planned to bring in its own management team, the US firm’s senior managing director Jeff Dishner said the group would work with the Principal Hayley management team to grow the enterprise, with Starwood providing capital and “branding expertise”.