InterContinental Hotel Group Acquires Kimpton up to $430 Million

InterContinent Hotels Group has spent $430 million in cash to repurchase Kimpton Hotels and Restaurants to add 62 hotels with the boutique style in 28 U.S cities and resort areas in order to create a series of investment for the boutique and lifestyle hotel.

According to IHG officials, Kimpton brand is felt a perfect fit with its Hotel Indigo and EVEN hotels brands.

“The distinctive and innovative Kimpton brand will fit perfectly into the IHG brand family. Adding Kimpton to our portfolio of preferred brands creates the world’s largest boutique hotel business. We will use our scale, network of owner relationships, and powerful digital platforms to accelerate Kimpton’s growth both within the U.S. and internationally.”said IHG Chief Executive Officer Richard Solomons

The acquisition gives the company cache in the industry’s hottest growing sector. Kimpton has been in the boutique business before it even became defined as a “thing” since founding the company in San Francisco in 1981. And it also is the world’s largest independent boutique hotel operator.

IHG officials said the move will double the company’s EBITDA (earnings before interest, taxes and amortization) from $20 million to $39 million by the end of 2017.

Having  more for chains in the U.S., with midscale brands like Holiday Inn and Holiday Inn Express and Candlewood Suites, and luxury-leaning brands InterContinental Hotels and Resorts and Crowne Plaza under its umbrella, IHG is very famous.

Moreover,  EVEN Hotels is added to its Hotel Indigo brand last year as it tried to make waves in the boutique sector, a hotel style known more for smaller properties and local culture than cookie-cutter design.

Kimpton hotels currently have 11,300 rooms and will add another 3,000 rooms with the hotels in development and under construction. In 2015, the combined brands will operate more than 200 boutique and lifestyle hotels in 19 countries.

According to Solomons, Kimpton COO Mike DeFrino will continue to lead the Kimpton team. He said that “Kimpton and IHG have many things in common, not least our shared values and approach to building brands.As an owner of a significant number of Kimpton hotels through our real estate investment funds, I am committed to developing additional Kimpton hotels and I look forward to seeing Kimpton go from strength to strength as part of IHG.”

Some people believe that both the Karma and IHG Rewards Club programs will run separately with no immediate changes to the Kimpton program.