Australia: Moelis Australia acquires Redcape Hotel Group in $520.6m deal

A security guard looks out from a window of the Australian Securities Exchange (ASX) with a board displaying stock prices behind him in Sydney, Australia, May 26, 2016. REUTERS/Steven Saphore

Investment bank Moelis Australia has acquired the Redcape Hotel Group in an A$677 million ($520.6 million) transaction, with plans for a listing on Redcape on the Australian Securities Exchange (ASX).

Redcape Hotel Group operates gaming-focused pubs and is owned by US hedge funds Varde Partners and York Capital. Goldman Sachs advised on initial deals and the most recent sale.

Moelis Australia CEO Andrew Pridham said, “We are delighted to have facilitated the acquisition of Redcape on behalf of our managed funds and co-investors. Moelis Australia managed funds have invested in the Sydney gaming hotel market since 2014 and have experienced outstanding returns for our investors.”

Redcape Hotel Group is forecast to deliver an initial cash yield to investors of 8.75 per cent per annum and earnings growth ranging from 3 per cent to 5 per cent per annum.

The acquisition of Redcape Hotel Group will boost Moelis’s forecast underlying earnings for this financial year by 25 per cent to A$29 million. Its purchase of property house Armada Funds Management is also supporting growth, with the firm aiming to have an A$2.5 billion in assets under management by end-2017

The vehicle used for the deal – the Moelis Australia Redcape Hotel Group – will also receive an A$40 million strategic investment from Moelis. The bank intends to wealthy investors for another A$30 million.

The sales deliver strong returns for Varde Patners and York Capital, which spun off Hotel Property Investments trust out of the pub businesses following its acquisition in the wake of the 2008 global financial crisis.

Moelis initially went into the deal alongside pub investor Nelson Meers, which eventually withdrew, leaving Moelis Australia to pursue the deal alone.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.