Actis, the private equity investor in emerging markets, and US firm Warburg Pincus, have made a $65 million (€48 million) investment in 7 Days Inn Group, the fastest-growing player in China’s budget hotel industry.
The investment will drive the expansion of 7 Days Inn’s national hotel network and strengthen the company's capital structure.
In a statement, Actis said the deal was a “strong sign of confidence” in the long-term future of 7 Days Inn and the budget hotel sector in China where budget chains are taking market share from higher-priced hotels.
7 Days has been the fastest growing company in China’s chain hotel industry for three consecutive years, according to a 2008 survey by the Ministry of Commerce and the Hotel Association of China. Through its seat on the board, Actis will work with the management to strengthen its strategy and operation.
Lim Meng Ann, head of Actis for China, said: “This investment fits into Actis’s strategy of investing in China’s domestic consumption sectors, particularly those which are defensive in times like this. 7 Days Inn will emerge from the current economic slowdown as one of the biggest and strongest in the industry.”