Marriott International signed a definitive agreement for its previously announced acquisition of Protea Hospitality Holdings, buying Protea’s three brands and management company for 2.02 billion rand (US$186 million).
The purchase price represents approximately 10 times anticipated pro forma 2014 calendar year EBITDA (earnings before interest, taxes, depreciation and amortization) excluding transaction costs.
Protea Hospitality Holdings, Cape Town, South Africa, 116 hotels with 10,148 guestrooms in seven African countries. At closing, Marriott International, Bethesda, Maryland, will become the largest hotel company in the Middle East & Africa region, nearly doubling its distribution there to more than 23,000 guestrooms.
As part of the transaction, Protea Hospitality Holdings will create a property ownership company to retain ownership of the hotels it currently owns, entering into long-term management and lease agreements with Marriott for such hotels. The property ownership company will also retain a number of minority interests in other Protea-managed hotels. At closing Marriott will manage approximately 45% of the rooms, franchise approximately 39% of the rooms, and lease approximately 16% of the rooms.