Hilton to buy Graduate Hotels in first brand acquisition since 1999

Hilton is set to acquire the Graduate Hotels brand for £165m following an agreement with Adventurous Journeys Capital Partners (AJ Capital).

 

The deal, which is Hilton’s first brand acquisition since 1999, will see it take on the rights to the 10-year-old company that operates more than 30 hotels in university towns in the US and UK.

 

Hilton believes the acquisition provides a “significant growth opportunity” for the group, particularly in its lifestyle segment, as it sees the potential for 400 to 500 Graduate hotels in the future.

 

Once complete, Hilton will acquire all rights to the Graduate brand worldwide and enter into franchise agreements for all existing and signed pipeline Graduate Hotels, including the Randolph Hotel by Graduate Hotels in Oxford and Graduate Cambridge (pictured).

 

AJ Capital will remain the owner of the current Graduate Hotels portfolio, which includes more than 35 operating and pipeline properties.

 

The Nashville-based Graduate Hotels was founded in 2014 and operates two UK hotels in Oxford and Cambridge as well as around 30 sites in US college towns such as Berkeley, California and Tucson, Arizona.

 

Chris Nassetta, president and chief executive of Hilton, said: “Adding Graduate Hotels to our portfolio of award-winning brands accelerates our expansion in the lifestyle space by pairing an existing much-loved brand with the power of Hilton’s strong commercial engine to drive growth.

 

“We have long had a high bar for adding brands to our portfolio, whether organically or through acquisition, and Graduate will be another driver of growth for us, presenting a unique opportunity to serve more guests in more sought-after destinations.

 

"With thousands of colleges and universities around the world, we believe the addressable market for the Graduate brand is 400-500 hotels globally.”

 

The deal is expected to close in Q2 and will be subject to customary closing conditions.

 

The Graduate Hotels brand will join Hilton’s lifestyle portfolio alongside Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton and Motto by Hilton, which was launched in 2018.

 

Deutsche Bank Securities Inc. was AJ Capital’s sole financial advisor on this transaction.