Palatine and BDC reap 2x on Hallmark Hotels exit

Originally, the Hallmark Hotels group consisted only of the Belfry House Hotel in Manchester. When Palatine and BDC took control they stated their intention to invest £50m in the company's growth strategy.

The GPs followed an acquisitive growth strategy for the business. The company bolted on regional three-star hotels and invested in operation and quality improvements, upgrading the sites to four-star standards.

In April 2008 the group added four new hotels in Carlisle, Bournemouth and Derby for a consideration of £25m. Two years later, it added the Hotel Elizabeth in Hull, which underwent a £3m renovation.

Topland, which focuses on infrastructure and real estate investments, has brought the number of hotels within its portfolio to 30 following the transaction. Last year, Topland acquired the Menzies hotel portfolio for more than £86m.

Hallmark's chief executive, Arnold Schnegg, and finance director James Hawksworth, have both left Hallmark as part of the sales process.

Previous funding
Palatine and BDC originally acquired a 78% stake in the business for £9.4m in 2007 and oversaw a buy-and-build growth strategy.

Management held the remaining balance of equity in the initial transaction with Allied Irish Bank providing a debt package to support the deal.

Company
Headquartered in Leeds, Hallmark Hotels operates eight four-star hotels across England. The group was founded in 2007 to acquire underperforming three-star hotels.

Hallmark Hotels operates more than 700 rooms and has a headcount of 600. The group recorded a turnover of £20.2m in 2013.

People
Gary Tipper is a managing partner at Palatine and Ed Fazakerley is a partner at the firm. Both held seats on the Hallmark Hotels board. Mark Stroud is a partner at BDC and also had a seat on the board.

Advisers
Vendor - KPMG, Neil Meredith, Jonathan Boye (Corporate finance); Shoosmiths, Mark Dawson, Karen Procter, Kelly Harvey (Legal).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Exits
• UK / Ireland
• Consumer
• United Kingdom
• Palatine Private Equity