McKillen jnr to sell majority stake in hotels to UK real estate group and Elliot

Paddy McKillen jnr and his business partner, Matt Ryan, have reached an agreement to sell a significant portion of their ownership in the Dean Hotel Group to British property group Lifestyle Hospitality Capital (LHC) and Elliott Investment Management, a prominent alternative investment firm founded by billionaire activist investor Paul Singer in New York.

This deal places a valuation on Dean Hotel Group’s portfolio of eight hotels, with two more currently in development, at more than €350 million. This valuation significantly surpasses the initial estimate of €250 million that industry experts had previously assigned to the group when it was put up for sale earlier this year, as per insider sources.

The Dean Hotel Group, with its distinctive brands, including the Dean, the Mayson, the Clarence, the Devlin, and the forthcoming Leinster hotel in Dublin, will continue to be operated and managed by the group itself. Additionally, Glasson Lakehouse near Athlone in Co Westmeath remains part of the portfolio.

Lifestyle Hospitality Capital (LHC) and Elliott Investment Management have outlined their plans to expand the group’s brands in both Europe and the United States.

Recently, the Dean Group acquired the freehold of the iconic Clarence hotel from U2’s Bono and the Edge, following their leasehold ownership since 2019. The group also has hotels in development in Belfast and Birmingham, expected to open by 2025. Restaurants and bars within the hotels will continue to be operated by the Dean Hotel Group under their respective brands such as Sophie’s, Ryleigh’s, Roberta’s, and Layla’s, as confirmed by the group in an official statement.

“We are thrilled to have finalized this transaction, which will forge a partnership between Ireland’s leading hospitality company and a top-notch hospitality investment management platform,” stated Mr. McKillen. He further expressed confidence in the continued success of the Dean Hotel Group, with LHC as partners who appreciate and embrace their distinct Irish vision of hospitality.

Keith Evans, the head of Lifestyle Hospitality Capital, emphasized the allure of the exceptional collection of locally designed and curated hotels, bars, and restaurants developed by Paddy and his team. He looks forward to preserving the Dean Hotel Group’s Irish heritage as they collaborate to usher in the next phase of growth for the portfolio.

The Dean Hotel on Harcourt Street in Dublin, the group’s first property, was inaugurated nine years ago by Press-Up Entertainment, the company founded by Mr. McKillen and Mr. Ryan in 2009. The ultimate parent company overseeing the Dean Hotel Group and Press-Up is Keillan Limited, registered in the Isle of Man. Press-Up is known for brands such as Wowburger, Elephant and Castle, the Irish franchise for Wagamama, and Stella Cinema in Rathmines.

The financial terms of the deal remain undisclosed, with the deal set to close by the end of the month. The transaction structure entails the sale of a majority stake to an investment vehicle managed by Lifestyle Hospitality Capital, headed by Mr. Evans, a seasoned player in the hotel deals sector, and supported by funds advised by Elliott Investment Management.

Elliott Investment Management, established by Mr. Singer in 1977, manages nearly $60 billion (€56.5 billion) in assets and is renowned for its involvement in activist stock market and private-equity investments. Real estate-related investments account for approximately $3 billion of its total assets.

This sale of a major stake in the hotel portfolio by Mr. McKillen jnr and Mr. Ryan comes five years after their decision to withdraw a planned initial public offering (IPO) of Press-Up, the venues management company within their larger group, due to market volatility at the time. They subsequently abandoned a plan to raise up to €50 million through the sale of a 45% stake in Press Up to investors.

The majority of the underlying properties in the larger group are held within a vehicle called Oakmount.