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Mantra acquires Outrigger’s Australian resorts

Mantra go public at ASX Sydney

Mantra has just been revealed as the buyer of Outrigger’s Australian operations, including the management of four properties, for AUD$29.5 million.

Mantra has reported to the ASX it has entered into an agreement to acquire Outrigger Hotels and Resorts Australia Pty Ltd, subject to customary completion adjustments and conditions.

It’s the second time a Mantra-related company has bought Outrigger in Australia. Back in August 2006, former owners MFS purchased the management rights of Outrigger’s then 13 existing resorts and six under construction in Australia and New Zealand for AUD$120 million. The properties joined the then labelled Stella Hospitality business and added 2000 rooms to the business.

Comprising a total of 984 keys under management, plus freehold title to Managers Lot real estate (comprising restaurants, conference facilities and other common areas), the Outrigger Acquisition presents Mantra Group with a significant investment opportunity, and is aligned with Mantra Group’s growth strategy to deliver shareholder value.

Properties in the deal include Outrigger Surfers Paradise, Outrigger Twin Towns Resorts in Coolangatta, Outrigger Little Hastings Street Resort and Spa in Noosa and the Boathouse Apartments by Outrigger Airlie Beach.

“The Outrigger Acquisition is a natural fit for Mantra Group, extending the Group’s footprint in key leisure destinations,” Mantra Group CEO, Bob East, said.

“This acquisition is complementary to our existing portfolio and, together with future pipeline growth initiatives, is expected to supplement Mantra Group’s strong organic growth with incremental earnings.

“We look forward to working with the owners, guests and team members to make the transition as smooth as possible.

“The properties are exceptionally well located. Our customers will be thrilled with the additions and our team is looking forward to welcoming the new team members and owners.

“To acquire properties in Airlie Beach, Noosa and Gold Coast in a single transaction is very rare, these areas represent the most popular and emerging tourism hubs in Australia.

“The Properties are well suited for domestic leisure guests, inbound guests and conference and incentive participants. This represents the ideal mix for hotel assets in this region.

“The Gold Coast and Noosa properties are large operations with multiple food and beverage and conference facilities. Our corporate and conference clients will be delighted with the acquisition,” he said.

As a result of the deal, Mantra Group is today launching a fully underwritten institutional placement to raise approximately AUD$50 million to assist in funding the Outrigger Acquisition as well as providing Mantra Group with additional capital to fund identified pipeline opportunities.

Mantra Group will also offer all existing eligible shareholders in Australia and New Zealand the opportunity to acquire additional shares (up to a fixed amount) via a non-underwritten Share Purchase Plan.

The impact of the Outrigger Acquisition and today’s Placement is expected to be accretive to EPS in FY16.

Settlement of the Outrigger Acquisition is expected to complete by June 2015, subject to closing conditions customary for an acquisition of this nature.

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