Mantra buys Outrigger in Australia

Mantra Group Limited (Mantra) has sealed the deal to acquire Outrigger Hotels & Resorts Australia Pty Ltd (Outrigger) for $29.5 million, adding a further 984 rooms to its collection of 51 hotels.

Under the agreement, Mantra will acquire all issued shares in Outrigger, which include four resort properties in Australia – Outrigger Surfers Paradise, Outrigger Twin Towns Resort, Coolangatta, Outrigger Little Hastings Street Resort & Spa, Noosa, and 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’s 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.”

Following the announcement on this morning’s ASX, Mantra will launch an equity raising to source approximately $50 million to assist in funding the acquisition, as well as providing Mantra with additional capital to funnel into pipeline opportunities.

The large-scale properties in key Australian holiday destinations are expected to boost Mantra’s footprint in Queensland, in which tourism has seen a rise of 8% in arrivals between 2013 and 2014.

“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,” East said.

“The properties are exceptionally well located. 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.”

Mantra will offer all existing eligible shareholders in Australia and New Zealand the chance to acquire additional shares via a Share Purchase Plan.

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

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