Room Mate Hotels Close to Sale To Angelo Gordon Westmont JV
Main Photo: The bedroom at Room Mate Macarena – Gran Via, Madrid
Date: July 2022
Name: Room Mate Hotels and Be Mate serviced apartments
Location: Across Europe: Spain, France, Netherlands, Italy and Miami & New York, Istanbul and Mexico City
Number of Keys: 2,000 across 28 properties
Seller: Room Mate, started by Olympic equestrian Kike Sarasola, in 2005. Room Mate filed for voluntary bankruptcy in Madrid in June 2022
Buyer: Still open, but JV Angelo Gordon and Westmont close to sealing the deal for €57m
Bankrupt Room Mate Hotels is close to selling itself to a new ownership group.
The Spanish chain has struggled over the course of the COVID-19 pandemic and officially declared bankruptcy at the end of June with the plan to complete a sale. The new owners according to multiple reports in the Spanish press will be alternative investment firm Angelo Gordon and Westmont Hospitality Group.
The offer on the table is €57 million, according to Okdiario, with PwC conducting the sale of the assets.
Angelo Gordon and Westmont initially invested in Room Mate in April 2022 to support the business and provide it with additional working capital. In order to fully restructure its debt, on June 24, 2022, Room Mate filed for insolvency with Commercial Court No. 14 of Madrid, which today approved the sale of the productive unit to Angelo Gordon in partnership with Westmont.
As a part of the transaction, Angelo Gordon and Westmont have agreed to maintain Room Mate’s current workforce of over 400 employees and assume nearly €40 million in commitments with lessors, suppliers, and clients.
Jacopo Burgio, Director, Europe Real Estate at Angelo Gordon, stated, “We are pleased to complete this complex transaction, which we believe is reflective of Angelo Gordon’s expertise and ability to execute on challenging yet compelling investment opportunities. Room Mate is a leading hotel brand with a loyal customer base and fantastic team, and we look forward to working closely with Company management and Westmont to capitalize on the significant opportunity for growth and expansion.”
Westmont Hospitality Group added, “We are excited to partner with Angelo Gordon to help Room Mate maximise its full potential. The Company has a great product and provides guests with a highly differentiated hotel experience. We believe that it is poised for success as the tourism sector continues to recover throughout Europe and beyond.”
Clifford Chance served as legal advisor to Angelo Gordon and Westmont on the transaction.
The company was founded in 2005 by Olympic equestrian Kike Sarasola and grew to a portfolio of 28 hotels with 2000 rooms. It also operated an extended stay apartment brand called Be Mate.
Speaking last year, Sarasola explained just how difficult it was at the hight of the funding to access funding.
“We cannot borrow more from the banks because in our sector they do not give money, so getting this credit, with market conditions for a debt like this has been very complicated,” he said.
Room Mate’s problems were also exacerbated by an apparent falling out with minority shareholder Sandra Ortega, daughter of the billionaire founder of clothing company Inditex Amancio Ortega.
Ortega put her stake up for sale in 2021 and this year tried to evict Room Mate from two hotels she owned in New York and Miami.
At this stage it’s difficult to know what direction the new owners plan to take Room Mate in, but both have a long track record of hospitality investment.
Angelo Gordon has an extensive portfolio of hotels. In 2019 it closed on a deal for five hotels in Paris and it bought a hotel in Hong Kong with joint venture partner Weave Living for $115 million.
Owner-operator Westmont Hospitality Group also has a long track record. Last March it agreed a deal with Invesco Real Estate that will see it take over the operations of a portfolio of 13 IHG branded hotels in Germany and the Netherlands.
Price: Thought to be around €57m
Price per Key: We assume the portfolio is a mix of owned assets and management agreements
THPT Comment: Interesting parties involved in this deal…not closed as yet, but looks like it will
First Seen: Hospitality Insights
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