Elegant Hotels Group plc (LON:EHG), the owner and operator of six upscale freehold hotels and a beachfront restaurant on the island of Barbados, have today announced that, through its subsidiary Treasure SL1 Limited, it has entered into a conditional agreement to acquire the entire issued share capital of Treasure Beach Limited, which holds the business, freehold property, and assets of Treasure Beach Hotel in Barbados. The consideration and renovation costs are expected to be approximately US$10.5 million in aggregate.
Treasure Beach is a 4-star, 35-room hotel in Paynes Bay, in the parish of St. James in Barbados. It is the adjoining property to Elegant Hotels’ Tamarind hotel, which in turn is situated next to Daphne’s and The House, which are also owned by the Group. As a result, the acquisition will mean that four of Elegant Hotels’ properties will account for a continuous 300 metre stretch of the prestigious west coast, or “Platinum Coast”, of Barbados. Treasure Beach occupies around 1.18 acres of land, and its amenities include a swimming pool, spa, and restaurant.
The agreement to acquire Treasure Beach is conditional upon completion of a credit agreement with the Group’s bankers, The Bank of Nova Scotia. The condition is expected to be satisfied before the end of April 2017.
The hotel will be operated under the existing brand until the end of July 2017 whereupon it will be closed. It will be refurbished, repositioned and ultimately repriced before being rebranded as ‘Treasure Beach by Elegant Hotels’, and it is expected to re-open for business at the start of November 2017. The Group plans to operate Treasure Beach as an adults-only European Plan hotel with an emphasis on a high-quality food offering. Guests of Treasure Beach will also be able to make use of the facilities of the neighbouring Tamarind hotel.
The consideration and renovation costs will be funded by a combination of operating cashflow and US$8.0 million from the Group’s existing credit agreement with The Bank of Nova Scotia. The acquisition agreement contains customary warranties and indemnities.
The Group expects Treasure Beach to be earnings enhancing for the 2017/18 financial year.
Commenting on the news, Sunil Chatrani, CEO of Elegant Hotels Group plc, said: “Treasure Beach is a resort that we know very well, given its close proximity to a number of our other sites, and it is an extremely attractive property that has been a long-term target for the Group. We are therefore delighted to be acquiring it, given the clear potential for operational and financial synergies, and look forward to integrating it into our portfolio. More broadly, this should be taken as a clear sign that Elegant Hotels is more committed than ever to executing its long-term expansion strategy.”