Funds advised by private equity firm CVC Asia Pacific (CVC) have agreed to acquire from MFS Limited a 65 per cent interest in Stella Group for A$400 million plus reimbursement of certain costs.
Stella Group is the leading integrated travel and hospitality group in Australia with growing operations in 12 countries including New Zealand, the United Kingdom, South Africa, United States and throughout Asia.
Stella Group comprises Stella Hospitality Group (SHG) and Stella Travel Services (STS)
- SHG is an accommodation business which includes the Saville, Peppers, Mantra, BreakFree brands in Australia and New Zealand, Protea Hotels and African Pride brands in Africa, with circa 4000 staff, and a 40% strategic stake in Golden Tulip the European based hotel company.
- STS is the largest integrated distributor of travel product in Australasia, with almost 3,000+ staff in 12 countries and a network of 2,100 retail and corporate outlets under banners including Harvey World Travel, Travelscene American Express, Gullivers Travel, Transonic Travel, Travelbag and Global in the UK.
Stella Group Managing Director Rolf Krecklenberg welcomed the transaction, which will now leave MFS Limited as a passive investor in the Stella Group. He said Stella Group’s management team and staff was looking forward to working with CVC to ensure the company builds on its success to date.
“This transaction is an excellent outcome for Stella Group and a great vote of confidence in the company’s strategy and outlook,” Mr Krecklenberg said. “We could not have wished for a better capitalised, more knowledgeable majority shareholder to help us grow our brands internationally and refine our business domestically.”
It is anticipated that the parties will complete the transaction as soon as foreign investment approvals have been obtained.
CVC Asia Pacific Managing Director, Ben Keeble, said that CVC is delighted to be taking a controlling interest in the Stella Group.
“Stella is a unique business in this market led by a high quality management team. We look forward to working with Rolf Krecklenberg and his team to continue to grow the Stella brands in Australia and overseas for the benefit of all stakeholders in the Company.”
Stella Group, which has operated as an independent subsidiary of MFS since July 1, 2007, will be completely separated under the new ownership structure with all existing executive management and staff retained. Stella Group would continue to pursue its strategy of acquiring quality travel services and hospitality assets in developing international tourism markets and destinations.
“With speculation about the ownership structure now settled, Stella Group can concentrate all its energies on achieving its financial and operational targets and adding value to our core partners,” Mr Krecklenberg said.
CVC was advised by Credit Suisse, Mallesons Stephen Jaques and PwC.