Zeus Private Equity adds four hotels to Hallmark Hotel Group in £25 million acquisition spree

Manchester-based Zeus Private Equity (ZPE) has added four hotels to its Hallmark Hotel Group, the company set up to carry out a buy and build strategy in the UK regional hotel sector.

ZPE has acquired the Lakes Court Hotel, a 70-bedroomed Victorian hotel in Carlisle city centre, and Durley Hall Hotel and Spa, a 77-bedroomed, Bournemouth-based hotel that has just completed a major leisure reconstruction. Both are 3 star properties. Also added to the Group are two Derby hotels – the 3 star, 88-bedroomed European Inn, and the Midland Hotel, a 4 star property boasting 100 bedrooms.

At a combined cost of around £25 million, these acquisitions take the total funding raised for the Hallmark Hotel Group to around £35 million, a figure that includes the Belfry House Hotel in Handforth, which was bought at the end of last year. A major refurbishment programme began at the Belfry at the start of 2008, with the first 12 renovated rooms now fully operational. The conference rooms are also being expanded and refurbished, and similar revamps are planned for the additional properties in due course. ZPE expects to add further hotels to the Group later in the year.

Commenting on the latest acquisitions, Gary Tipper, managing partner of ZPE, said: "These acquisitions highlight our ability to support our portfolio companies with continued investment. In the case of the Hallmark Hotel Group, this is allowing the management team to create a branded chain of regional, 4 star hotels."

Senior debt facilities for the acquisitions were provided by Allied Irish Bank in Manchester, with the team led by Steve Sherratt. ZPE was advised on the acquisitions by Rebecca Grisewood, Mark Dawson and Lucy Valerio of Halliwells, with financial due diligence carried out by Matt Copley and Stephen Green at BDO Stoy Hayward. Allied Irish Bank was advised by Rob Fawke and Philip Treanor at Pannone.

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