Marriott International has become the largest hotel company in Africa, by completing its acquisition of the 116 hotel Protea Hospitality Group.
Marriott now operates or franchises more than 4,000 hotels in 79 countries.
In January, Marriott concluded the Protea takeover, which included Protea’s three brands and management company, in a deal worth about R2.02bn.
The Protea portfolio consists of 103 hotels, including the brands Protea Hotel Fire & Ice, African Pride Hotels and Protea Hotels, and has a total of 10,148 rooms in seven African countries, including South Africa.
As part of the transaction, the previous owners of Protea Hospitality Group created an independent property ownership company that retained ownership of the hotels the group formerly owned and entered into long-term management and lease agreements with Marriott for those hotels, Marriot said.
The property ownership company also retained a number of minority interests in other Protea hotels. This meant Marriott would manage about 45% of Protea’s rooms, franchise about 39%, and lease about 16%.
The R2.02bn purchase price represented about 10 times Protea’s expected pro forma 2014 calendar year earnings before interest, taxes, depreciation and amortisation, excluding transaction costs, Marriot said.
“Today marks a new beginning. We can now officially say molweni, sawubona and hello to South Africa and welcome to our approximately 15,000 new associates at both managed and franchised hotels across Protea’s portfolio. We look forward to integrating the superb Protea team into the Marriott International family, and together, to work toward new opportunities for growth and advancement throughout South Africa and the continent,” Marriott International’s president and CEO, Arne Sorenson, said.
Marriott said it did not expect the Protea acquisition to have a material effect on its 2014 earnings.