Duke Street checks out of French hotels

Eurazeo, the Paris-listed private equity firm, has acquired 100 percent of the equity of hotel company Financière Galaxie from a consortium led by midmarket firm Duke Street Capital. The value of the deal was not disclosed.
 
Founded in 1990, Financière Galaxie is the operator of the French budget hotel chain B&B Hotel and runs 100 budget hotels in France and eight in Germany. The company had a turnover of €76.4 million ($91.0 million) in the year to August 2004.

Duke Street acquired it from two private individuals and 18 financial institutions in July 2003. Three co-investors, including London-based Hermes Private Equity, acquired a 23 percent stake in the company in the transaction.

’The appeal of the company was our identification that the budget hotel sector was likely to be an attractive place to be because of its resilience to economic downturn,’ explained Buchan Scott, an executive in Duke Street’s London office.

Last July the firm completed a €223 million refinancing of the chain to consolidate its mortgage debt into a single facility.
 
Duke Street Capital has offices in London and Paris, and focuses on mid market leveraged buy-outs in the hotel and leisure, healthcare and consumer goods sectors. It has around €2 billion of equity under management.
 
Earlier this month it was announced that Duke Street’s chairman Edmund Truell was stepping down as chairman to concentrate on a new venture and would not be involved in the firm’s next fundraising.
 
Eurazeo manages more than €4 billion of assets, mainly in French speaking countries. The firm is also in the news today, having sold its stake alongside Carlyle in French tile manufacturer Terreal for €860 million. The firm is listed on Euronext Paris.