French hospitality giant Accor has sold 60 per cent stake in its entry-level budget hotel chain Formule 1 in India to privately held hotel investment and development firm Samhi Hotels for an undisclosed amount in a move to go asset light in the emerging market. Under the Formule 1 banner, it has a total of 15 properties in various stages of development of which just two are currently operational in the country.
Accor will retain 40 per cent stake in the hotel chain in India and will continue to operate them under long-term management contracts. It will also retain the rights to own and/or develop further Formule 1 projects in India, the company has said on Monday.
It has operational hotels under the brand in Greater Noida and Ahmedabad, and another is slated to open soon in Pune’s Hinjewadi area.
Hotel Formule 1 is an international chain of no-frills hotels owned by the Accor Group. The brand has been consolidated along with a few other budget brands within Accor, such as ‘ibis budget.’ In the emerging markets, it retains the Formule 1 brand.
Accor, which also owns a number of other hotel brands such as Pullman, Sofitel and Novotel, had earlier this year sold its budget hotel business in the US and Canada under Motel 6 and Studio 6 to buyout giant Blackstone for $1.9 billion. This comprised around a quarter of its total hotel properties around the world.
As a group, it owned/operated (including franchises) hotels in more than 90 countries, with 4,426 properties ranging from economy to luxury (as of December 2011).
Last year, Gurgaon-based Samhi raised $100 million in two rounds of funding, including $25 million from GTI Capital and $75 million from Equity International, according to VCCEdge, the data research platform of VCCircle. This comes as the second acquisition by Samhi this year. In April, it had snapped up Royal Orchid Ahmedabad Pvt Ltd for a total consideration of $12.84 million from Royal Orchid Hotels Ltd. Post transaction, Royal Orchid continues to manage the Ahmedabad property.
Founded in 2010 by Steve Rushmore, Ashish Jakhanwala and Manav Thadani, Samhi focuses on the development, acquisition and ownership of select-service business-class hotels across India.
(Edited by Sanghamitra Mandal)
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