Proprium Capital Partners Sell 35% Stake in Motel One Group

Proprium Capital Partners, a real estate private equity firm spun out of Morgan Stanley, on Tuesday announced the sale of its 35% stake in Motel One Group, a leading European affordable design hotel company, to the majority shareholder One Hotels & Resorts GmbH, led by the founder Dieter Müller, for a purchase price of $1.36 billion.

Principals of Proprium have been active minority shareholders in Motel One over the past 17 years. They acquired the 35% stake as part of a $70.54 million investment in 2007 – Motel One’s last capital increase. Proprium recapitalised the investment in 2019.

The sale price of $1.36 billion values the company at an enterprise value of $4.45 billion and a 2023 EBITDA valuation multiple of 14 times. Including dividends, the sale price implies a multiple on invested equity in excess of 20 times for the original investors making this an extremely successful real estate private equity transaction.

Since its foundation by Dieter Müller in 2000, Motel One has been a pioneer and market leader in the affordable design hotel category in Europe and has since developed into a highly profitable, fast-growing and award-winning brand hosting nine million guests annually.

True to its motto “Like the Price, Love the Design,” Motel One offers a high-quality design product at an attractive price in excellent city centre locations.

Since Proprium’s initial investment, Motel One has expanded in Germany and internationally and currently operates 94 hotels with 26,470 rooms. Including the pipeline, growth to 117 properties with more than 32,000 rooms in 56 cities is secured.

The launch of the new lifestyle brand “The Cloud One Hotels” not only marked the opening of the first hotel in New York, but also ushered in a new phase of growth for the Company.

Profitable Growth

Philipp Westermann, Partner & Head of Europe of Proprium, said that they have been a long-term partner with Dieter Müller and the Motel One team on its impressive growth journey for more than 15 years. Motel One has delivered outstanding profitable growth since inception by combining a unique design-led hotel concept, a disciplined and cash generative business model and an entrepreneurial culture.

“While the sale of our stake in Motel One will generate very attractive returns for our investors, we leave Motel One very well positioned with an enormous potential for future growth. The investment in Motel One exemplifies Proprium’s commitment to platform investing, aimed at delivering outsized private equity returns within the real estate industry,” he said. Dieter Müller said that together with Proprium, they have built Motel One into an international platform and brand and expect continued strong and profitable growth in the future.