New Delhi, April 24 -- 360 One-backed Apeejay Surrendra Park Hotels, the operator of The Park Hotels, announced on Wednesday that it has entered into an agreement to acquire Mumbai-based Zillion Hotels and Resorts Pvt Ltd, which operates Z Luxury Residences in Juhu. The move is aimed at expanding its hospitality inventory in the near-to-mid-term, Apeejay Surrendra Park Hotels said in an exchange filing.

Headquartered in Kolkata, the company will acquire Zillion Hotels for Rs 209.3 crore. The deal primarily involves buying out the stakes held by the Handa and Nair families, former promoters of the Leela Hotel chain. Post-acquisition, Zillion Hotels will become a subsidiary of Apeejay Surrendra Park Hotels.

Z Luxury Residences, which includes 62 luxury serviced residences and food & beverage (F&B) facilities, will also be part of Apeejay Surrendra Park Hotels' portfolio.

As per its last earnings report, Apeejay Surrendra manages 36 hotels with a total of 2,495 keys. "Over the next five years, we are on track to double our key count to a total of 5,048 keys. This includes development of 830 keys of our own, which include Pune - 200 keys, Kolkata - 250 keys, Vizag - 100 keys, Navi Mumbai - 170 keys, and Jaipur - 150 keys," Vijay Dewan, managing director of the company, had said during the post-earnings analyst call for Q3 FY25.

This marks the company's first acquisition since its public listing in February last year, when it raised Rs 920 crore through an IPO, comprising Rs 600 crore in fresh issuance and Rs 320 crore via offer for sale.

Founded as Budget Hotels Ltd in 1987, the company now ranks among India's 10 upscale hospitality players. Apeejay Surrendra Park Hotels is part of the Apeejay Surrendra Group, which also has interests in shipping, tea, real estate, and education. The group owns retail brands like Oxford Bookstore.

With over five decades of hotel management experience, the company operates three brands: The Park, The Park Collection, and Zone by The Park. For Q3 FY25, it reported its highest ever quarterly revenue of Rs 177 crore, with a 17% year-on-year rise in profit after tax to Rs 47 crore, as per the company.

In addition to hotels, the company also runs an F&B retail business under the brand 'Flurys', which celebrated the opening of its 100th outlet in January this year in Hyderabad's Bajara Hills.

Among its notable investors are 360 One's Special Opportunities Fund - Series 9, Kuwait Investment Authority (each holding less than 1.5%), and Credit Suisse's RECP IV Park Hotel Investors Ltd, which owns about 2.67%.

Credit Suisse initially invested Rs 220 crore in 2007 via three Mauritius-based entities- RECP IV Park Hotel Investors Ltd, RECP IV Park Hotel Co Investors Ltd and REFS Park Hotel Investors Ltd--acquiring about 15% of the company, according to VCCircle estimates. In 2017, Apeejay bought back half that stake for Rs 31.5 crore. By early 2021, 2.29% had been transferred to the company's promoters. At the time of its draft red herring prospectus, Credit Suisse still held 5.28% stake. It sold part of its stake during the company's initial public offering.

Zillion Hotels & Resorts was incorporated in 2001. Its current director Tejas Handa was appointed in 2019, and additional director Sujith Damodar joined in October last year. Former directors include Vivek Nair (former MD of Hotel Leelaventure) and Dinesh Nair, among other members of the Nair and Handa families.

Published by HT Digital Content Services with permission from VC Circle.