UK- Zeus-backed Hallmark Hotels acquires Hotel Elizabeth

The Hotel Elizabeth, to be renamed Hallmark Hotel Hull, has been bought out of administration from its former parent company Elizabeth Hotels. NatWest has provided debt to support the transaction.

The Hull hotel will undergo a £3m renovation, involving extensive refurbishement and a significant programme for operational improvement. Hallmark Hotel Hull has 95 bedrooms and eight conference suites. All 60 members of staff will be retained.

Zeus PE provided equity funding to establish the Hallmark Hotels group in October 2007 with the aim of acquiring underperforming three-star hotels and converting them into four star hotels in the UK. The Hull is the sixth acquisition to be completed by the group, which already operates the Belfry House Hotel Handforth, Lakes Court Hotel Carlisle, the European Inn, the Midland Hotels Derby, the Durley Hall Hotel and Spa Bournemouth.

Private equity is no stranger to investment in the hotel sector in the last year, despite the dowturn in consumer spending. In June of last year, Permira backed its portfolio company Principal Hayley, the hotel conference group, with £12m of fresh capital for the acquisition of two new properties.

Haliwells provided legal advice to Zeus Private Equity.

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