Mantra Group to expand into the US market
Listed Gold Coast based hotel operator Mantra Group is planning to expand into the United States and has raised $107 million to help fund its first acquisition in the US market.
The funds raised will see Mantra buying the giant 1000+ room Ala Moana Hotel in Honolulu for US$52.5 million ($72.7 million).
Apart from the 1086 key hotel business, the other assets acquired include the freehold title to reception, administration areas, and all car parking. Mantra also picks up the freehold title to six food and beverage outlets and freehold title to nine function rooms, totalling 1350 square metres.
The property is just 2 kilometres from Waikiki Beach.
As Australia’s second-biggest accommodation operator, with 126 properties and more than 15,000 rooms under management, Mantra is on an acquisition spree.
It already has operations in New Zealand and Indonesia and added nine new hotels to its network, including four on the Gold Coast and one in the Brisbane CBD in the first half of this financial year.
Bob East, Mantra’s chief executive officer, said: “The Ala Moana Acquisition is an exciting opportunity for the Mantra Group providing a platform to enter a new offshore market with a significant property that is well aligned to Mantra Group’s core business, expertise and growth strategy.
“This acquisition complements our existing portfolio and is expected to make a significant contribution to Mantra Group’s business.”
It’s the second time in 12 months that Mantra has raised funds for an acquisition. In May 2015, it tapped institutional investors and raised $50 million to fund its expansion program with the acquisition of the four Outrigger Hotels & Resorts in Australia.
Mantra has some funds left over from the Ala Moana acquisition and the speculation is it’s looking at snapping up more assets in Hawaii.
Mantra reported earnings of $24.3 million in the first half, reaffirming its full-year guidance last week of between $41.5 million and $43 million in net profit.
By Leon Gettler, May 24th 2016
