Pandox strikes deal to sell DoubleTree by Hilton Montreal in major transaction

Monday, February 26, 2024

Pandox AB (publ) has recently inked a deal to sell off the DoubleTree by Hilton Montreal in Canada, including both its property and operational aspects, at an approximate transaction value of MCAD 80. The finalization of this transaction is slated for the second quarter of 2024.

“With the divestment of DoubleTree by Hilton Montreal, we realise values and free up capital for investments with higher return potential in our home markets where we can execute hotel property development more efficiently. We have owned the hotel property since 2008 and have in stages, together with a strong team in Montreal, successfully developed the hotel product. We are happy to have reached an agreement with a strong local hotel property owner who can take the hotel property, with its challenges and opportunities, to the next level”, says Liia Nõu, CEO of Pandox.

With a gross transaction value reaching MCAD 95, and accounting for necessary structural investments (specifically, facade renovations) estimated at around MCAD 15, the net transaction price aligns at MCAD 80, mirroring the property’s book value as of December 31, 2023. This valuation takes into account projected investment requisites for the hotel property, anticipated profitability of its operations, and Pandox’s constrained economies of scale in Montreal’s management and operational landscape, particularly evident post the divestment of InterContinental Montreal in 2023, leaving Pandox with only one remaining hotel property in the area. Notably, the hotel property is free from encumbrances. The hotel garnered approximately MCAD 50 in revenue during 2023.

The transaction, structured as asset and liability divestiture, is anticipated to conclude in the second quarter of 2024, subsequent to customary due diligence procedures adhering to Canadian norms. Per Canadian practice, the buyer is expected to provide a deposit, which would be forfeited in the event of transaction abandonment. The buyer, a well-established hotel property owner and developer headquartered in Montreal, is the acquiring party.

The hotel, categorized within the Own Operations business segment, boasts 595 rooms.

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