McCann lines up funds to buy hotels
The former boss of the Jurys Doyle hotel group is lining up financial backing to bankroll hotel acquisitions in Ireland by the end of the year.
Pat McCann, who is chief executive of the country’s largest hotel group – Dalata – confirmed to the Irish Independent that his team was in London on Friday to sound out potential funding arrangements.
He declined to say how much Dalata might seek to raise, but it would almost certainly have to run into the millions of euro.
The Dalata group has a stable of 30 hotels, all but one of them in Ireland. It manages 13 properties on behalf of receivers, five under contract with hotel owners and the remainder it owns and operates under the Maldron brand.
The company was founded in 2007 on the cusp of the economic collapse. Mr McCann stumped up €1m of his own money for the venture, in which he has a 13pc stake.
About 80 private clients of Davy Stockbrokers put up another €20.5m and the Shane Reihill-headed investment group TVC invested €10m. Dalata also borrowed the guts of €15m.
It used the funding to pay just over €46m for 10 hotel properties, which it bought from developer Paddy Kelly.
But having endured tough trading for a few years, Dalata has built a solidbusiness on the back of securing management contracts.
In 2011, it notched up earnings before interest, tax, depreciation and amortisation (EBITDA) of €2m, compared to €800,000 in 2010.
“What we need to do is convert unsustainable contract-management revenue into longer-term revenue,” said Mr McCann.
Among the properties Dalata manages are Whites in Wexford, the Citywest Hotel in Dublin and the Heritage Golf and Spa Resort in Portlaoise. It manages and controls a total of 5,500 bedrooms.
Mr McCann added that while he would be interested in acquiring some of the properties that Dalata currently manages, initial purchases would be outside that property pool.
He professed himself to be agnostic in terms of location as long as the hotels have a good mix of corporate, leisure, conference and wedding business.
“We have great market knowledge and are in a great position,” he said, adding that Dalata was examining a number of funding opportunities.
“There are lots of different things we’re looking at,” he said. “We’re seeking the best methodology at the moment.”
Any funds raised could be a mixture of finance sourced from financial institutions and private individuals.
Mr McCann said that the longer-term financing and growth prospects were being targeted by Dermot Crowley.
He is joint deputy CEO of Dalata and was also head of development at Jurys Doyle from 2000 to 2006. The other deputy CEO is Stephen McNally, who’s also a former Jurys Doyle executive. Source: Irish Independent