Singaporean sovereign wealth group GIC has agreed to buy a majority stake in Mediterranean luxury resort operator Sani/Ikos Group in a buyout that values the company at €2.3bn, the biggest deal in the European hotel sector since the Covid-19 pandemic.
A clutch of investors, including US-based asset manager Oaktree Capital, Goldman Sachs’ asset management unit and London-based private equity firm Hermes GPE, will exit the business after selling their stakes to GIC. They first came on board when the hotel group was formed by a merger in 2015.
Since 2015, the revenues of the Greece-headquartered group, which owns and operates 10 beachfront resorts with around 2,700 rooms across Greece and Spain, have more than tripled from £88mn to a projected figure of €319mn for this year. Sani/Ikos is also pushing ahead with a five-year, €900mn expansion plan, which will add four more redeveloped resorts to its portfolio.
The acquisition by GIC comes as fears grow over a recession across Europe this winter, as the energy crisis resulting from Russia’s invasion of Ukraine has drained consumer confidence. Most of Sani/Ikos’s clientele is drawn from Germany and the UK. But the Singapore state fund is betting on the luxury sector defying the downturn.
Last month, Fitch Ratings cut its outlook for the group’s long-term debt to “negative” from “stable”, but kept the rating at B-. It said the business’s cash flow could come under pressure from its large expansion plans but that it benefited from “lower demand sensitivity” to a consumer downturn and “a record of above-average recovery post-pandemic” compared with peers in the luxury hotel sector.
Lee Kok Sun, chief investment officer of GIC’s real estate division, said the “excellent hospitality experiences” for guests helped Sani/Ikos stand out. “We believe this investment will generate resilient returns and is testament to our confidence in the Greek and wider European tourism sector over the long term,” he added. The deal is expected to close by the end of the year.
GIC told the FT in July it was focusing its investment strategy on inflation-protecting businesses which can pass on cost increases to customers. This year, GIC has taken stakes in the Paddington office estate in London and university accommodation providers The Student Hotel and Student Roost.
Sani/Ikos traces its origins to the Sani Club, a resort opened in 1971 by Greek hotelier Anastasios Andreadis, which expanded over the following decades.
Andreadis’s sons — Stavros and Andreas — became major shareholders in the group when it was formed from a merger of Sani Resorts and Ikos Resorts in 2015, alongside former Oaktree executive Mathieu Guillemin. All three will stay on as shareholders and continue working with the business.
Andreas Andreadis and Guillemin, who serve as co-CEOs, said in a joint statement that the company had “led a remarkable path” of growth over recent years “despite the pandemic”. Bookings across the 10 resorts this year were up 52 per cent on last year and 57 per cent on pre-pandemic levels. The company added that early 2023 bookings were strong.
“We can now solidify our leading position across the Mediterranean, to the benefit of our shareholders, our people and the communities where we operate,” they added.