Private equity-backed hospitality firm Sinclairs Hotels Ltd is looking to acquire brownfield and operational assets across markets and in cities like Bangalore, Mysore, Hyderabad, Chennai, Kolkata, Bhubaneswar and Patna, apart from the gateway cities New Delhi and Mumbai, the company has said.

This paves the path for a mix of organic and inorganic expansion programmes for the hotel company.

Sinclairs, backed by infrastructure, hospitality, retail and real estate-focused investment firm the Xander Group, had acquired a majority stake in Savannah Hotels Pvt Ltd last November. Savannah Hotels owns Savannah Sarovar Premiere, an upscale 104-room business hotel in Whitefield, Bangalore.

Sinclairs has just announced the re-opening of Sinclairs Retreat Ooty, a 72-room and 7-suite hill resort. The property went through a renovation and upgradation programme in 2011.

Kolkata-based Sinclairs Hotels last traded at Rs 261 a share. At this price, the debt-free firm has a market cap of Rs 158 crore and is trading at 30x its FY11 earnings.

Sinclairs currently owns and operates five properties in Siliguri, Darjeeling, Dooars, Port Blair and Ooty. It is also developing three additional hotels which include a 46-room luxury resort in Kalimpong, a club-and-banquet complex with a 20-room hotel in Burdwan and a 106-room premier business hotel in Rajarhat, Kolkata. With the Bangalore acquisition and the upcoming projects, Sinclairs’ total room inventory will increase to over 600. Its hotels in Kalimpong and Burdwan are expected to be commissioned this year.

Sid Yog, Managing Partner of the Xander Group Inc. said, “We are very pleased to see Sinclairs Hotels on a consistent, fast growth track. Since December 2007, the company’s share price has increased 75 per cent, reflecting the firm’s strong operational performance and the market’s growing confidence in the firm. With a strong balance sheet, zero debt, six operating assets and three additional projects in the pipeline, the company is uniquely poised to take a more aggressive view on expansion through bolt-on acquisitions.”

The Xander Group had originally acquired around 26 per cent stake through a mix of preferential allotment of equity and warrants for Rs 27 crore. It had also co-invested in the company, along with the Spanish private equity firm Meridia Capital (focused on the hospitality sector) and the US-based Morgan Creek, nearly four years ago. These investors had picked shares at Rs 172 a piece. Xander also came up with an open offer after converting the warrants into equity and currently holds 32.6 per cent in Sinclairs Hotels.

Among other deals in the hospitality space, Hotel Leela Venture recently sold its Kerala property for Rs 500 crore to NRI industrialist B. Ravi Pillai while Mayfair Hotels & Resorts acquired Oberoi’s Palm Beach property at Gopalpur-on-Sea in Orissa. In another deal, Indian Hotels Company Ltd, the country’s largest hospitality firm that runs a chain under the Taj Hotels brand, raised its equity stake in an associate firm Piem Hotels and made it a subsidiary with an investment of up to Rs 51 crore.

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