Integrated design solutions company Millitoons Entertainment plans to foray into the hospitality sector by acquiring 9 companies in the US for $73.25 million (approx Rs 491 crore). "The company has drawn major plans to enter the hospitality sector in a big way and entered into an agreement to acquire nine companies in the US which own well established hotels for a total cost of $73.25 million equivalent to Rs 491 crore," Millitoons Entertainment said in a BSE filing.
The company said the cost of acquisition will be "financed by debt continuation in the books of the respective companies with US banking institutions to the tune of $61.25 million and balance $12 million shall be paid by the company to acquire 100 per cent stake in the said companies".
The hotels run by these companies are under contract with well established brands such as Holiday Inn. The company is also in the process of renovating the property and signing management contract with Sheraton Plus and another one with Best Western.
The transaction is expected to be closed in various stages ranging from 2-12 months after completion of due diligence/obtaining statutory approvals and completing financial closure by Millitoons to meet its obligations.