Quinlan sees Jurys Inns marching across Europe

Private equity real estate firm Quinlan Private has set a target to have up to 75 Jurys Inns hotels up and running within next five years, including 15 in central and eastern Europe, according to sources familiar with fundraising presentations being made by the company. The firm, led by Derek Quinlan, acquired the budget hotels chain in a €1.165 billion deal during the summer from Jurys Doyle Hotel Group.

Quinlan recently started a €400 million equity fundraising for the deal. It is understood to have received subscriptions for about half the amount within weeks of starting the fundraising and indicative commitments for a further €100 million, subject to due diligence. The cash call is scheduled to close at the end of next month. Anglo Irish Bank is providing the debt financing for the deal. The Jurys Inns business currently consists of 21 hotels in operation in Ireland and the UK, with a further eight in development.

Quinlan plans to ramp up the roll-out in these markets over the coming years, largely adhering to a schedule set by the hotel chain’s previous owners, Jurys Doyle. However, the real growth opportunity is in central and eastern Europe. Sources say that 120 cities have already been identified as being able to accommodate a Jurys Inn over the next 10 to 12 years.

It is understood that Quinlan has already secured a site for a Jurys Inn in Budapest and is already in advanced negotiations on a further 10 - mainly in cities in Poland, the Czech Republic and Hungary. The company is targeting a 20% annual return for investors over five years - or a two-and-a-half times return on their outlay, said sources who have seen an information memorandum issued by Quinlan.

Quinlan Private partner Peter Donnelly is leading the drive on the continent. The firm has about 140 people working in the region through its Quinlan Private Golub joint venture with Chicago-based developer Golub & Company. The firm has also recently hired Avi Nota, former chief executive of the European division of Tel Aviv-listed investment group Africa Israel, to add to its expertise in the area. The appointment, widely covered in the Israeli media, is considered a significant coup for Quinlan, according to property sources. Potential investors have heard that Quinlan Private will consider an exit within five to seven years.

It is likely that the business will be partially or totally refinanced well before that time to provide for an interim return for backers. Quinlan Private outbid London-listed leisure group Whitbread and Lydian Capital, the Swiss-based investment vehicle run by former Kerry Group boss Denis Brosnan, in the race to acquire the budget hotel chain in June. Lydian is backed by Irish racing tycoons JP McManus and John Magnier. UK-based private equity house Permira had also been a contender up until a week before the auction closed. (independent.ie)