ATLANTA—InterContinental Hotels Group (IHG) has acquired Six Senses Hotels Resorts Spas. The $300 million cash acquisition from Pegasus Capital Advisors includes all of Six Senses’ brands and operating companies and does not include any real estate assets.
Six Senses currently manages 16 hotels and resorts, with 18 management contracts signed into its pipeline, and more than 50 further deals under active discussion. With properties in locations such as the Maldives, the Seychelles, Yao Noi in Thailand, Zighy Bay in Oman, and Portugal’s Douro Valley, the addition of Six Senses’ estate and development pipeline will further round out IHG’s position in the luxury segment.
Six Senses will sit at the top of IHG’s luxury portfolio, complementing the luxury hotel brand, InterContinental Hotels & Resorts; the recently acquired and repositioned Regent Hotels & Resorts; and Kimpton Hotels & Restaurants, for which IHG has secured a presence in 14 countries, since its acquisition of the brand in 2015. Today’s acquisition of Six Senses takes IHG’s portfolio of open and pipeline luxury hotels to 400 hotels (108,000 rooms) globally.
By combining IHG’s scale, systems and operational excellence with Six Senses’ luxury, resort and spa expertise, IHG sees the potential to grow the Six Senses estate to more than 60 properties globally over the next 10 years. This includes bringing Six Senses to important urban markets, with a property already under construction in West Chelsea neighborhood in New York City.
- IHG has agreed to acquire Six Senses Hotels Resorts Spas and its management business for $300 million in cash.
- Six Senses is an asset-light business. It manages 16 hotels and resorts (1,347 rooms), and there are a further 18 management contracts signed into its development pipeline. The open hotels include two properties for the upscale resort brand, Evason. With a further 50 deals under active discussion, IHG expects to accelerate Six Senses’ growth globally to more than 60 hotels over the next 10 years.
- The acquisition includes the entirety of Six Senses’ brands and operating companies and does not include any real estate assets. It includes Six Senses’ spa operations, which are core to the brand’s luxury and wellness positioning. Six Senses operates 37 spas in total under the Six Senses and LivNordic brand names, and also provides spa consultancy services. The Six Senses management will remain in place.
- Six Senses currently generates fee revenues of more than $13 million. The acquisition is expected to be EBITDA breakeven in year two and to generate a return approximately equal to its cost of capital by year four.
- For tax purposes, the transaction constitutes an asset sale for the purchaser, and as such IHG will be entitled to amortize the assets acquired. It is anticipated that the relief associated with this amortization will reduce IHG’s future cash taxes by approximately $75 million.
“Six Senses’ attractive development pipeline provides us with a platform for high quality growth,” said Keith Barr, CEO of IHG. “With the power of the IHG enterprise, we believe we can expand Six Senses to more than 60 properties globally over the next decade. This acquisition continues the progress we’ve made against the strategic initiatives we outlined a year ago, which included a commitment to adding new brands in the fast-growing $60 billion luxury segment.”