Scandic to Acquire Dalata Hotel Group for $1.6 Billion
Scandic Hotels Group AB, has entered into an agreement with a Scandinavian consortium, led by Pandox AB and Eiendomsspar AS, to acquire the hotel operations of the Ireland’s Dalata Hotel Group for $1.6 billion.
Proceeding with the transaction is conditional upon completion of the consortium’s takeover of Dalata, which was announced on Tuesday, a separation of Dalata’s real estate and operating businesses and necessary regulatory approvals.
Upon completion of the transaction, Scandic will add 56 new hotels to its portfolio with around 12,000 additional rooms and a further pipeline of approximately 1,900, mainly across Ireland and the UK.
The transaction is subject to completion of the Dalata acquisition, which is expected to take place towards the end of 2026. It is subject to and conditional upon completion of the consortium’s public takeover offer, the separation of Dalata’s real estate and operating business and necessary regulatory approvals.
For the financial year ended 31 December 2024, Dalata reported revenue of $757.81 million; operating profit of $184.17 million; and basic earnings per share of $41.25 cents. Dalata owns and operates hotels primarily in Ireland, where it holds a leading market position, and in the UK.
Transaction Details
Under the terms of the transaction, Scandic would take over the operations of 56 hotels. Of these hotels, 53 would be acquired on a leasehold basis and three would be managed. Scandic would be subject to new lease agreements with the Consortium for 31 of the hotels, with the remainder continuing to operate under existing third-party agreements. The consortium would maintain ownership of Dalata’s freehold and long leasehold property portfolio.
Scandic will manage Dalata’s hotel portfolio pursuant to the terms of a management agreement in the interim period between completion of the Dalata acquisition and completion of the transaction. The management fee would be paid to Scandic quarterly and calculated on the revenue of the operating business during the interim period.
Scandic would pay an anticipated price of $580.96 million (on a cash and debt-free basis and subject to normal completion adjustments for cash, net debt and net working capital) for the operating business, subject to adjustments as agreed upon in the framework agreement reflecting the outcome of the separation of the operating business.
More Value for Stakeholders
Jens Mathiesen, Scandic President & CEO, said that Scandic has a strong platform, making them well-positioned to deliver on their 2030 strategy. At the same time, they were open to new business opportunities that can create more value for Scandic’s stakeholders.
He said that Dalata is a high-performing operator with strong brands and leading or established positions in attractive markets. The company primarily operates in the mid-market segment and shares a similar business model with Scandic.
“Overall, Dalata is a good fit for us. We see this as an opportunity to add a growth platform in new and attractive markets at an attractive valuation. Scandic’s strong financial position enables us to pursue this opportunity with balanced leverage. At the same time, we will continue to deliver on our existing strategy that we presented on the capital markets day,” he added.
