Irish hotel group Dalata has agreed to acquire the leasehold interest of four hotels in Ireland and the UK for an enterprise value of €40 million.
The hotels are the Gibson Hotel in Dublin, the Croydon Park Hotel in south London, the Clarion Hotel in Cork and the Clarion Hotel in Limerick.
The leasehold interest comprises of operating leases with an average term of 18 years outstanding.
The Dalata group said plans to invest €14 million over the next two years in refurbishing the four properties, and will rebrand them all as Clayton hotels.
As part of the deal, Dalata will also take over the management of the Clarion Liffey Valley Hotel in Dublin, under a short term management contract.
Dalata deputy chief executive Dermot Crowley said the deal gives the hotel group a further 960 rooms in the cities of Dublin, Cork and Limerick.
“The transaction also allows us to further grow our portfolio in the UK with the addition of 211 rooms in Croydon,” he added.
Underlying earnings before interest, tax, depreciation and amortisation (ebitda) for the four hotels in 2015, after adjusting for costs and revenues that will not transfer as part of the transaction, is expected to be €4.1 million.
Including revenues from the short term management contract, underlying ebitda is expected to be €4.7 million.
Dalata said the acquisition is subject to approval of the Competition and Consumer Protection Commission and Grant Thornton acting as receiver of the freehold interest in the Gibson Hotel.
Dalata acquired the four-star Clarion in Sligo town for €13.1 million earlier this month, just weeks acquiring the Tara Towers Hotel in Dublin for €13.1 million.
Dalata, which was founded in June 2007, is the biggest hotel operator in Ireland. In March 2014, it raised €265 million through the issue of existing ordinary shares and listed on the AIM market in London and the ESM in Dublin.