InterContinental Hotels To Buy Kimpton Hotels & Restaurants For $430 Mln

(RTTNews) - InterContinental Hotels Group Plc.(IHG, IHG.L) said that it has agreed to acquire Kimpton Hotels & Restaurants Group LLC for cash consideration of $430 million.

Kimpton was established in 1981, and is the largest independent boutique hotel and restaurant business in the US.

The Kimpton Real Estate Investment Funds, which are run by four existing Kimpton executives, expect to make future investments in Kimpton branded hotels. The Funds own approximately 30% of Kimpton's existing and pipeline properties and intend to raise additional funds to acquire, develop and redevelop boutique hotels. As part of this investment platform, the Funds expect to have a meaningful and on-going relationship with the Kimpton brand.

Kimpton's EBITDA is expected to be approximately $20 million for the year ended 31 December 2014, and IHG expects to be able to deliver future growth in Kimpton EBITDA to approximately $39 million by 2017 from the opening of hotels in the pipeline and the achievement of certain back office and technology savings.

InterContinental noted that Kimpton team will continue to be led by Mike DeFrino, currently Kimpton's COO.

The Transaction will be financed through existing cash resources and new debt facilities, and is expected to close during the first quarter of 2015 upon satisfaction of certain customary conditions, including Hart-Scott-Rodino anti-trust clearance and Kimpton shareholder consent.

For US tax purposes, the transaction constitutes an asset sale for both the vendor and purchaser, and IHG is entitled to amortise the assets acquired. It is anticipated that the relief associated with this amortisation will reduce future taxes by approximately $160 million.