GTIS Partners and GP Investments have closed their August 2014 $400 million tender offer for the shares of Brazil Hospitality Group, a Brazilian hotel owner. The deal gives GTIS Partners an about 70 percent stake in the company, with the remainder owned by GP Investments. The deal gives GTIS and GP Investments 52 hotels to operate, comprising 10,000 rooms, mostly in Sao Paulo and Rio de Janeiro’s oceanfront.
GTIS Partners L.P., a real estate private equity firm headquartered in New York City with offices in São Paulo, Los Angeles, San Francisco and Paris, and GP Investments, a leading alternative investments firm in Latin America, with offices in São Paulo, New York, London, and Bermudas, today announced they have successfully concluded their August 2014 $400 million tender offer for the shares of Brazil Hospitality Group (BHG). BHG is Brazil’s largest hotel owner and one of the country’s leading hotel operators.
The deal gives GTIS Partners an approximately 70% stake in the newly-private company, with the remainder of the shares owned by GP Investments.
“The take-private of BHG is an example of the current market opportunity in Brazil,” said Tom Shapiro, President & CIO of GTIS Partners. “By taking advantage of the capital markets’ dislocation, we can acquire high-quality assets at cyclically low prices at substantial discounts to replacement cost. We are thrilled to partner with GP Investments, one of the most experienced and respected private equity investors in Brazil, on this deal.”
By virtue of the deal, GTIS Partners and GP Investments now own and operate 52 hotels comprising 10,000 rooms, much of it concentrated in Sao Paulo and on Rio de Janeiro’s oceanfront. The existing pipeline is expected to take the total numbers of keys to 14,000 within 24 months.
“The BHG transaction is the largest in GTIS’ history and reflects our conviction that Brazil today offers a unique combination of near-term distress coupled with medium to long-term growth,” said Josh Pristaw, Senior Managing Director and Co-Head of GTIS Brazil. “It is a very compelling time to have an established platform in Brazil and capital to allocate.”
“The size and complexity of this opportunity required the full complement of our platform capabilities in both Brazil and the US,” said Joao Teixeira, Senior Managing Director and Co-head of GTIS Brazil. “It is a testament to the operating and financial capabilities we have built at GTIS in 10 years of investing in Brazil.”
“We have been analyzing the hospitality market in Brazil closely for more than four years,” said Robert McCall, Director on the GTIS Brazil team and leader of the BHG transaction. “With high barriers to entry and a very fragmented market, we view the BHG platform as a very unique and compelling asset through which to capitalize on positive secular trends in the lodging industry in Brazil.”
“We have spent the last 7 years building a platform of high quality assets in premium locations, creating from scratch one of the largest hotel companies in the country,” said Antonio Bonchristiano, CEO of GP Investments. “Now it is time to focus on improving the quality of the product and services with a robust renovation plan and repositioning of selected hotels”.
“We could not think of a more appropriate partner for this stage of the investment than GTIS Partners, a firm with a successful track record in the Brazilian real estate market and in the hospitality sector in the US,” said Fersen Lambranho, Chairman of GP Investments.
GTIS Partners has been actively investing in Brazil real estate since 2005, making it one of the first investment firms to recognize the potential of that country’s real estate markets. The firm is one of the largest foreign real estate investors in Brazil, with approximately $USD 2 billion of equity capital allocated spanning some 40 investments.
GP Investments was founded in 1993 as the first private equity firm in Brazil, and has since become a leader in alternative investments in Latin America. Since its foundation, GP Investments has raised over $USD 5 billion from investors worldwide and has completed investments in more than 50 companies in a diverse array of sectors.
About GTIS Partners
GTIS Partners is a global real estate investment firm headquartered in New York with offices in Los Angeles, San Francisco, São Paulo, Brazil, and Paris, France. GTIS Partners has 75 employees and currently has approximately $3.2 billion of assets under management. To date, the firm has committed capital to residential, retail, industrial, office, hotel and mixed-use projects in the U.S. and Brazil. In the U.S., GTIS has invested in over 70 projects across 20 states, including 55 projects in the residential sector. In Brazil, GTIS has invested in 38 projects comprised of approximately 15,000 residential units developed or planned, and six million square-feet of office, industrial and hotel projects. For further information, please visit www.gtispartners.com.
About GP Investments
GP Investments is a leader in alternative investments in Latin America with a strong presence in asset management, principally private equity funds. Since its foundation in 1993, GP Investments has raised over US$5 billion from investors worldwide and has completed investments in more than 50 companies. GP Investments was the first investment company in Latin America to go public, through an initial primary offer in 2006. Shares are listed on the Luxembourg Stock Exchange and trade on BM&FBovespa, the Brazilian Stock Exchange, via Brazilian Depositary Receipts (BDRs). The company currently has investments in private equity, real estate and infrastructure, in addition to its direct stakes in BRZ Investimentos, an asset management subsidiary, and in Spice Private Equity Ltd., a Switzerland-based investment company. For more information, please see GP Investments’ web site (www.gp-investments.com) or contact the IR department.