Morgans Agrees to Buy 90% of Light Group for About $46.5 Million
Morgans Hotel Group Co. (MHGC) said it will acquire control of Light Group, an operator of restaurants and nightclub bars, for about $46.5 million to enhance its hotel- management business.
Morgans, which operates the Royalton and Mondrian hotels, will buy a 90 percent stake in Light Group. The company runs such venues as the Bank Nightclub at the Bellagio Hotel and the Diablos Mexican Cantina at the Monte Carlo Hotel, both in Las Vegas, for MGM Resorts International (MGM), Morgans said in a statement today.
Morgans, based in New York, has been selling some properties and using the proceeds to expand its management business. The company said the transaction may lead to additional partnerships with MGM and new hotel-management contracts.
The acquisition “will position us to increase our food and beverage profits, drive average daily rate growth at existing hotels and win and service new management agreements,” Morgans Chief Executive Officer Michael Gross said.
Morgans said it will pay $28.5 million in cash when the transaction is completed, likely by the end of the year. The deal will immediately add to Morgans’ earnings, the hotelier said. Light Group’s management agreements produce about $8 million of earnings before interest, taxes, depreciation and amortization annually, Morgans said.
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