Home Inns Group announces acquisition of eJia Express Hotels
Home Inns & Hotels Management Inc., a leading economy hotel chain in China, announced that it has completed an acquisition of 100% ownership of Anhui Youle Fashion Hotel Management Co., Ltd. and Anhui Meibang Hotel Management Co., Ltd. (collectively "eJia Express") for a total of RMB59.8 million (approximately US$9.4 million) in cash.
eJia Express is a regional economy hotel chain in Anhui Province with 13 leased-and-operated hotels and a total of 1,284 rooms. All 13 eJia Express hotels will be rebranded to Home Inns, significantly increasing Home Inns’ brand presence in the region. The average remaining lease term for the 13 hotels is approximately 8 years. Prior to the eJia acquisition, Home Inns Group operated in Anhui Province with 18 hotels under the Home Inns brand and 14 hotels under the Motel 168 brand.
The per room acquisition cost including conversion cost is expected to be below the average cost of per organically developed Home Inns hotel room. The total cash consideration averages to a per room consideration of approximately RMB47,000 and Home Inns expects to invest less than RMB10,000 per room for the conversion and rebranding of these hotels into Home Inn hotels. This will occur gradually over the next 6 months with minimum operational interruption.
Mr David Sun, Chief Executive Officer of Home Inns & Hotels Management Inc., is a speaker at the 4th annual Economy Hotels World Asia 2012 Day 1.
Case Study: How Home Inns successfully adopted M&A to expand – Insights into the Motel 168 transaction (11.20am, Tuesday, 11 September 2012)
The 4th Annual Economy Hotels World Asia 2012 is the only dedicated economy hotel conference focusing on economy and limited services in the hospitality sectors. It will be held in Singapore from 10 – 12 September 2012. Visit our website or download conference brochure for more information.