THE DEAL
In December 2004, NPIL acquired Menzies Hotels, the four-star hotel chain. The enterprise value of the business, comprising 14 hotels, was £120m. NPIL financed the acquisition through a mixture of equity and debt. Over the investment period, NPIL added to the portfolio through the acquisition of the Menzies Glasgow Hotel in April 2005 and the Menzies Cambridge Hotel and Golf Course in January 2006. Significant investment was also undertaken at the Welcombe Hotel in Stratford to add a spa and leisure complex to the group’s flag-ship property. In October 2006 NPIL completed the sale of the Menzies Hotels business to property investors aAIM and R20, for £180m. This exit combined with the sale of the Salcombe Hotel in the summer of 2006, took the total exit value to in excess of £190m.

THE NPIL DIFFERENCE
NPIL worked alongside the company founder, Nick Menzies, and the senior management team, who were also shareholders in the business. NPIL’s strategy was to utilise Menzies Hotels as a platform for further consolidation in the UK hotel market and to generate further growth within the existing estate.
NPIL fully supported Nick and the management team to expand and grow the business further, including the provision of funding for hotel acquisitions and investment in the existing estate. This funding combined with the management leadership and the expanding multiples in the hotel sector, enabled NPIL to realise an attractive return in less than two years.

THE BUSINESS
Under NPIL ownership, Menzies Hotels owned and operated a portfolio of 16 four-star hotels, located throughout the UK. It had 1,468 bedrooms and suites, offered a comprehensive range of quality restaurants and bars, extensive conference and private dining facilities, nine health and fitness clubs and two championship golf courses.