PE backers to exit 7 Days Group to hotel operator Jin Jiang
A group of PE backers, including The Carlyle Group and Actis Capital, are set to exit Chinese budget hotel chain 7 Days Group as industry peer Shanghai Jin Jiang Hotels agreed to acquire a majority stake in the company for RMB8.3 billion ($1.3 billion).
According to a filing, Hong Kong-listed Jin Jiang will acquire a 81% stake in Keystone Lodging, parent of the 7 Days Hotel Group, at an enterprise valuation of RMB10.8 billion. Jin Jiang will fund this transaction with cash and loans.
Carlyle will sell a 22.13% stake, while Actis will offload 13.87%. Sequoia Capital and GIC Private will exit 15.7% and 4.4%, respectively. Chinese online traveling site Ctrip International will also sell about 4%, while individual investors offload approximately 21%.
7 Days Group was delisted from the New York Stock Exchange two years ago at a valuation of $688 million. The take-private deal received backing from Carlyle, Sequoia and Actis.
Jin Jiang operates over 1,700 hotels in 11 countries. In August last year, Hony Capital acquired a 12.43% stake in the company for RMB15 billion. Last November, the hotel operator agreed with Starwood Capital to buy Europe's second-largest hotel group Louvre Hotels for reported EUR 1.2 billion ($1.5 billion), gaining more than 1,100 hotels in over 40 countries.
The purchase of Keystone Lodging is pending regulatory approval.
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