SBE announced the $800 million acquisition Monday. Morgans manages the Mondrian on Sunset Boulevard and eight other high-end hotels. The newly combined company will own or operate 20 upscale hotels in San Francisco, Miami Beach, New York and elsewhere.
The Mondrian’s general manager is Norbert Relecker, an active figure in promoting the Sunset Strip.
“We have long admired Morgans, its impressive history and culture of service and innovation, so we’re delighted to reach an agreement on this transaction,” said SBE founder and CEO Sam Nazarian. Nazarian will continue as CEO of the combined companies.
“Our strategic vision is to operate these amazing and unique lifestyle properties in key international gateway markets, and Morgans’ hotels, along with their talented team, fit perfectly within that vision,” he said.
SBE is paying $2.25 per share in cash for the outstanding shares of Morgans, according to media reports that put an equity value on Morgans of about $82 million. The total enterprise value, including assumption of debt, would be about $800 million, a spokesperson confirmed.
Morgans, founded by nightclub icons Ian Schrager and Steve Rubell, helped launch the boutique hotel movement in the 1980s. In recent years, Morgans has suffered financially with major competition from large hotel chains that have adopted the boutique model.