Euro-Asia private equity fund A Capital says it has partnered with French hotel operator the Louvre Hotels Group, to build 50 hotels in Germany within the next four to five years, according to a company announcement from A Capital.
The pair has acquired 10 hotels under the Balladins brand in Germany from the DHM group, but specific deal terms were not disclosed. A Capital is a majority shareholder in the joint effort.
The hotels consists of five three-star and five four-star hotels totaling 1,246 rooms located in cities in Western Germany including Frankfurt, Köln, Dortmund, Bremen and Mannheim.
The parties plan to renovate and re-brand the hotels under the Tulip Inn and Golden Tulip brands, both owned by the Louvre Hotels Group. After the completion of the renovation, the hotels will be operated by Louvre.
A Capital also has plans to help the Louvre Hotels Group to attract tourists from emerging markets such as China. The deal is expected to close in the summer of 2014.
"With this transaction we will double our footprint in the German market, and we will create a platform for further investment in the near future," says Matthieu Evrard, chief development officer of the Louvre Hotels Group.
This is the second deal that A Capital has done in the hospitality industry. In 2010, A Capital co-invested with Fosun International to take a minority stake of European vacation resorts operator Club Med.