Connection Capital and Riverside buy the Cresta Court Hotel

Carmen Reichman
22 February 2013

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Connection Capital and Riverside Capital have teamed up to acquire the Cresta Court Hotel in Altrincham and its operating company Harrop Hotels in a ТЃ2.95m MBI.

Connection Capital and Riverside invested £2.05m while earmarking an additional £1m for a refurbishment and rebranding of the Cresta Court Hotel. The investors hold a large majority stake in the business.

The new management team, Longrose Buccleuch Management Ltd, and the previous owner of the business provided the remainder of the equity. The hotel will undergo a comprehensive refurbishment programme and rebrand to Best Western Plus, part of the Best Western group.

Connection Capital and Riverside formed a partnership in 2012 by acquiring the business and assets of Hotbed Ltd, a high-net-worth property and private equity syndication business, in a 50:50 joint venture.

Debt
The equity-to-debt ratio for this transaction is understood to stand at 55:45. Santander provided a £1.7m loan facility as part of the deal. Further funds will be drawn following the completion of the refurbishment.

Company
Built in the late 1970s, the Cresta Court Hotel is based in Altrincham, Greater Manchester. The business has 140 rooms and its customer base includes leisure users, corporates and airport customers. The company employs 115 people and expects to yield an EBITDA of £350,000 in the coming year, from a turnover of £3m.

People
Riverside Capital's Ed Henson acted as investment adviser for the acquisition and will monitor the investment going forward.

Advisers
Equity – RSM Tenon (Financial due diligence); EMW (Legal).
Management - Teacher Stern (Legal).