We Now Know What Hilton Paid for NoMad Hotels: Just $56 Million
Skift Take
Key Points
- Hilton acquired a majority controlling interest in the Sydell Group, owner of NoMad Hotels, for $56 million.
- Hilton plans to expand NoMad Hotels from a single property in London to a larger luxury brand.
- The acquisition is relatively inexpensive and focuses on expanding Hilton's presence in the lifestyle hotel market.
Summary
Hilton acquired a majority stake in the Sydell Group, owner of NoMad Hotels, for $56 million, marking one of the most cost-effective deals in recent years by a major hotel group. The acquisition, which includes brand and management contract intangible assets, is part of Hilton's strategy to expand the NoMad Hotels brand from a single property in London into a global luxury brand known for unique local art collections. Hilton's approach is similar to Hyatt's recent acquisitions, focusing on expanding its lifestyle hotel offerings by leveraging the NoMad brand's strong perception and market potential.
When Hilton announced last April that it had acquired a majority controlling interest in Sydell Group, the owner of NoMad Hotels, it did not disclose deal terms. But Hilton revealed the price in an annual financial filing posted Thursday: Just $56 million.
That's probably one of the cheapest deals for a brand by a major hotel group in recent years.
In the filing, Hilton stated: "In April 2024, we acquired a controlling financial interest in both Sydell Hotels & Resorts, LLC and Sydell Holding Company UK Ltd (collectively, the "Sydell Group"), which owns the NoMad brand."
"We accounted for the transaction as a business combination and recognized the fair value, which included measurement period adjustments made subsequent to the acquisition date, of an indefinite-lived brand intangible asset of approximately $48 million and management contract intangible assets, with an aggregate fair value of approximately $8 million."
The $56 million may not be the total final price.
Earlier last year, Hilton's financial filings said that remaining "noncontrolling" equity interests held by others in the Sydell Group can be sold to Hilton in 2030 or bought by Hilton in 2032. These interests had "a fair value of $22 million as of the acquisition date."
Plans for NoMad
Hilton plans to scale up NoMad Hotels from a single property in London today to a luxury brand with hotels that "are both grand and intimate" and have "special touches like unique local art collections featured in each property," the filing on Thursday said.
"If you're going to buy a brand ... then the perfect thing to do is to buy something that is small, but it feels much bigger, and grow it," said Chris Nassetta, Hilton president and CEO, when speaking at a press conference at the Americas Lodging Investment Summit, or ALIS, in Los Angeles last week.
"Nomad is in a crowded space, a space that we have wanted to be in for a while," Nassetta said.
"It was pretty well known despite being only one hotel, and it has a brand ethos that we wanted to scale up," Nassetta said. "It had a great perception.... In the next 10, 15 years, there might be 30 to 50 in the most important urban destinations."
"Maybe one other player has something similar to us," Nassetta said. "So it's a space we needed to be in."
NoMad may become most closely comparable to Marriott's Edition brand over time.
Comparable Deals
The NoMad acquisition appears to be relatively inexpensive compared to some other recent acquisitions. The deal mainly involves intellectual property for the brand, staff knowledgeable about boutique hotels, and a management contract to run a hotel in London.
One comparable recent acquisition was Hyatt's purchase of Standard International's brands last year. Hyatt bought The Standard, The Peri Hotel, and a few smaller brands for a base purchase price of $150 million, with an additional $185 million contingent on further properties entering the portfolio, bringing the transaction value to $335 million.
Like Hilton, Hyatt wanted to buy talent and intellectual property to scale up its lifestyle hotel offerings more quickly. It has since established a dedicated lifestyle group led by Standard International's Executive Chairman, Amar Lalvani.
Back in 2022, Hyatt acquired Dream Hotel Group’s lifestyle hotel brands, including Dream Hotels, The Chatwal Hotels, and Unscripted Hotels. Initially, Hyatt spent $125 million to acquire Dream Hotel Group’s existing hotels. Additionally, if Hyatt purchases all two dozen signed long-term management agreements for planned hotels, it will pay an extra $175 million over time.
Accommodations Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.
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Photo Credit: A reception area in the lobby of the NoMad London hotel. Hilton
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