Ireland's second-biggest hotel group is being sold to a US investment firm

Tifco owns the Travelodge franchise as part of its portfolio of 26 hotels and resorts across Ireland.

By Peter Bodkin Editor, Fora

GOLDMAN SACHS-BACKED HOTEL group Tifco is due to be sold to US investment outfit Apollo Global Management after being put on the market with a reported price tag of up to €600 million.

The State’s competition watchdog was recently notified that a subsidiary of Apollo, which in 2012 bought Bank of America’s Irish credit card unit, had agreed to acquire “the majority of the business and assets” of the Tifco group.

It is not known what parts of the business were excluded from the deal. The hotel outfit is the second-largest hotel operator in the country, either owning or managing a portfolio of 26 hotels and resorts across Ireland with a combined 2,600 beds.

It runs both branded hotels under franchise agreements, such as the Crowne Plaza at Dublin Airport and the Hilton at Kilmainham, and non-branded venues like the Clontarf Castle Hotel.

Neither Tifco nor Apollo had responded to a request for comment at the time of publication.

Goldman Sachs took over the business, which was formed by Aidan Crowe and Gerry Houlihan, after buying its debts from IBRC in 2014.

A windfall

The two businessmen, alongside Tifco managing director Enda O’Meara and other executives, became minority stakeholders in the company after a restructuring deal and are in line for a substantial windfall from the sale.

In 2017, Goldman Sachs added the Irish Travelodge franchise to the Tifco group in a deal worth nearly €46 million. The purchase added 12 hotels and more than 900 rooms from the no-frills chain to the existing group.

The Competition and Consumer Protection Commission will complete a preliminary investigation into the deal before deciding whether the takeover should be approved. 

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According to its most recent accounts, Tifco posted revenue of €37.2 million in 2017 for a net profit of €4.5 million. The firm’s directors reported that the group’s revenue per room had grown more than 10% during the year on the back of a buoyant hotels sector.

The firm reported tangible assets of €93.6 million at the end of the period, while it had outstanding debts of €59.8 million. It had an average of 316 staff on its books during the year. 

Irish hotels have been pulling in record profits around the country amid soaring room rates driven by high demand and an acute shortage of beds, particularly in Dublin.

Note: An earlier version of this article stated the Metropole hotel in Cork is managed by Tifco. It is in fact managed by the Trigon group.

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