Proprium sells stakes in Motel One for €1.25bn

Proprium has exited its 35% stake in the European hotel business to its co-owner, 17 years after making its original investment.

Stamford-based manager Proprium Capital Partners has sold its stake in European hotel company Motel One Group for €1.25 billion.

Proprium offloaded its 35 percent stake in Motel One to the majority shareholder One Hotels & Resorts for €1.25 billion, according to a statement.

The price implies an enterprise value of €4.1 billion and a 2023 EBITDA valuation multiple of around 14 times for the company.

The sale brings Proprium’s long-term investment in Motel One to a close. Proprium originally bought its stake for €65 million in 2007, recapitalizing the investment in 2019.

Philipp Westermann, partner and head of Europe of Proprium, said: “While the sale of our stake in Motel One will generate very attractive returns for our investors, we leave Motel One very well positioned with an enormous potential for future growth.”

“Together with Proprium, we have built Motel One into an international platform and brand and expect continued strong and profitable growth in the future,” said Motel One founder Dieter Müller.

Müller founded the business in Munich in 2000 and expanded it internationally with funding from Proprium in 2007. Currently, the company operates 94 hotels with 26,470 rooms in 13 countries. It has a further investment and development pipeline expected to see it grow to 117 properties in 56 cities.

In 2022, the group also launched another hotel business called The Cloud One Hotels. For that, there’s a plan to introduce 13 properties in the US and Europe by 2026.

Morgan Stanley was the financial adviser for the sale of Motel One.

Hengeler Mueller and Freshfields Bruckhaus Deringer were the legal advisers to One Hotels & Resorts and Proprium respectively.

Proprium is not the only manager looking to benefit from an uptick in investment activity within the European hospitality sector. Among other firms also seeking an exit is Goldman Sachs’ private equity platform, which was reportedly exploring the €3.5 billion sale of European budget hotel chain B&B Hotels in March, according to a Bloomberg report.

European hospitality is expected to become more attractive for real estate investors on the back of the sector’s full recovery from the pandemic, according to JLL’s Global Hotel Investment Outlook 2024.  More broadly, the broker said in 2023, revenue per available room surpassed 2019 levels across global regions by 12 percent, with Middle East, Europe and American markets leading the way.