CitizenM Explores Potential Sale as Hotel Chain Seeks Capital

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Skift Take

CitizenM is looking for new growth capital. Might it sell to one of the large hotel groups?

CitizenM, a premium economy hotel chain, has engaged bankers to review a possible sale of either a minority stake or the entire company, according to a report in the Financial Times Wednesday. The owners are being advised by Morgan Stanley and Eastdil Secured.

“We can confirm that CitizenM is looking for new growth capital,” a spokesperson told Skift. “Nothing further to add.”

The Dutch hotel company’s owners include Dutch pension firm APG, Singapore’s sovereign wealth fund GIC, APG Asset Management, and KRC Capital, a private equity firm founded by CitzenM founder Rattan Chadha.

In early 2019, GIC took a 25% equity interest in CitizenM off what it said was an enterprise value of about $2.3 billion (€2 billion).

In 2021, the company raised $1 billion from existing investors to expand post-pandemic. More than half of the hefty sum went toward expanding the brand, which has doubled in size to 40 properties and 10,000 rooms over five years.

Selling a stake or the whole company could enable some shareholders to recover some of the money they’ve invested and possibly collect gains.

CitizenM is a fully integrated hotel real estate developer and hotel operator. That business model puts it at odds with the major hotel groups, which have been shedding assets in an asset-light strategy favored by Wall Street.

A more likely buyer might be another investment entity. Saudi Arabia’s Public Investment Fund has acquired a significant minority stake in Rocco Forte Hotels, the operator of 14 luxury properties, in December. The deal valued the portfolio at $1.8 billion, including debt. In 2022, Cain joined Saudi Arabia’s Public Investment Fund in a $900 million investment in Aman Group.

Accommodations Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.

Read the full methodology behind the Skift Travel 200.

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