As M&T had reported, under the deal, Israel Canada Hotels will acquire most of Brown Hotels’ business operations in Israel, including hotels in Tel Aviv and Jerusalem, the rights to the Brown brand, the membership program, digital assets and the company’s website, free of any prior debt. The deal also includes the purchase of the chain’s operations in Greece.
The acquisition will allow Israel Canada Hotels to integrate the business operations of 10 hotels in Israel (approximately 930 rooms) and 8 hotels in Greece (approximately 1,067 rooms). In total, following the transaction, the company will double the number of hotel rooms under its management, operating approximately 3,600 rooms throughout Israel and internationally.
As part of the deal, Israel Canada Hotels will pay approximately NIS 38.5 million in cash and assume an additional debt of approximately NIS 74 million to cover Brown’s financial obligations to various institutions.
Upon completion of the deal, there will be a rent to be paid by Israel Canada to the Arountown fund, which owns most of Brown’s hotels in Greece. In essence, Israel Canada is acquiring the lease agreements that Brown Hellas had signed with the owner of the properties, with a strong possibility of transfer at the end of the lease term.
Reuven Elkes, partner and managing director of Israel Canada Hotels, expressed his confidence in the deal, stating: “We have reached an agreement with Brown Hotels and we are confident that the court and the Antitrust Authority will approve the transaction. This deal presents a unique opportunity to expand business operations, improve service quality and penetrate new markets while leveraging Israel Canada Hotels’ strong management infrastructure.”
With the completion of the deal there is expected to be a change of leadership in the Greek company.
The Aroundtown fund
Aroundtown SA is a real estate company focused on quality income producing properties with value-added potential in central locations in leading European cities, primarily in Germany, the Netherlands and London. Aroundtown invests in commercial and residential properties that benefit from strong fundamentals and growth prospects. Aroundtown invests in residential properties through its subsidiary Grand City Properties SA (“GCP”), a listed real estate company focused on investing in value-added opportunities primarily in the German residential real estate market.
The fund’s portfolio includes a number of hotels in major European capitals, such as the iconic Hilton in Berlin, the H4/H2 at Alexanderplatz in Berlin, the Steigenberger in Cologne, the Mercure in Munich, the Penta Hotel in Paris, the Atrium Hotel in Paris, the Mercure in Düsseldorf, as well as numerous conference centres and even railway stations, such as Frankfurt Central Station.
Already in its portfolio of properties it has the following 5 hotels in Greece.