Motel One valued at £3.5b as founder takes back full control

Budget hotel chain Motel One has been valued at £3.5b after a deal to return control of the company to its founder.

Real estate private equity firm Proprium has sold back its 35% stake to majority shareholder One Hotels & Resorts for £1.1b.

One Hotels & Resorts is led by Dieter Müller, who founded Motel One in Munich in 2000 with the ambition of launching affordable design hotels across Europe.

Proprium has been an active minority shareholder in the hotel group for 17 years, having first acquired a 35% stake for £55.6m in 2007.

Since Proprium’s investment, Motel One has expanded to 94 hotels with 26,470 rooms in Europe, including eight properties in the UK.

It is aiming to grow to 117 hotels with more than 32,000 rooms in 56 cities.

Motel One also launched its new lifestyle brand, the Cloud One hotels, in December 2022, with its first opening in New York.

The sale will provide Proprium with a 20-times return on its initial investment, including dividends.

Philipp Westermann, partner and head of Europe at Proprium, who led the transaction for Proprium, said: “We are proud to have been a long-term partner to Dieter Müller and the Motel One team on its impressive growth journey for more than 15 years.

“While the sale of our stake in Motel One will generate very attractive returns for our investors, we leave Motel One very well positioned with an enormous potential for future growth.”

Müller added: “Together with Proprium, we have built Motel One into an international platform and brand and expect continued strong and profitable growth in the future. We thank the Proprium team led by Philipp Westermann for their trust and contribution.”

The transaction closed on 2 April, with Morgan Stanley acting as financial advisor, and Hengeler Mueller and Freshfields acting as legal advisors to OHR and Proprium respectively.

Proprium is a spin-off from the Morgan Stanley Real Estate Special Situations team and has over £3.2b of net assets under management, including in hospitality.

Image: Shutterstock