Blackstone’s overall profit from Hilton deal? A whopping $14B

Deal is most profitable leveraged buyout in history

TRD New York /
May.May 18, 2018 06:00 PM

The Hilton in Midtown and Jonathan Gray

Blackstone Group sold its remaining shares in Hilton Hotels, an 11-year investment that many questions at first but turned out to be the most profitable leveraged buyout in history.

Blackstone will realize a profit of $14 billion in total after agreeing to sell its remaining 15.8 million shares back to Hilton for $1.3 billion, Bloomberg News reported.

The private equity firm put up $6.5 billion in equity with co-investors in 2007 to take the hospitality company private. Blackstone then wrote down the investment by 70 percent amid the financial crisis and later put infused cash and restructured the company’s debt before taking it public again in late 2013.

Blackstone president Jonathan Gray said “this was initially a very difficult investment” and credited Hilton CEO Christopher Nassetta’s leadership.

“The steep revenue declines could have easily dissuaded us, but the continued commitment of the entire firm paid off in a big way,” Gray said. “We saw a ton of white space in Europe and China for this company, and our thesis held together through the crisis and that’s what gave us confidence.”

When Blackstone put the deal together in mid-2007, the acquisition was 80 percent leveraged with financing from Bear Stearns.

Hilton in 2015 sold the Waldorf Astoria hotel to Anbang Insurance Group for $1.95 billion, and later spun off other company units.

“Often, success in private equity is attributed to financial engineering, but the Hilton transaction shows that isn’t the case,” Gray said.

HNA Group in 2016 bought a 25 percent stake in Hilton from Blackstone for $6.5 billion. [Bloomberg] – Rich Bockmann


Related Articles

arrow_forward_ios
28 Liberty Street (Wikipedia)

Manhattan’s office leasing sees busiest month since January

Manhattan’s office leasing sees busiest month since January
Maison Kayser (Photo via Tools of Men via Flickr)

Maison Kayser may bid New York adieu

Maison Kayser may bid New York adieu
Newmark’s Brian Waterman with 7 Hanover Square (Google Maps, Twitter)

Newmark nabs REBNY prize for deal with NYC Health + Hospitals

Newmark nabs REBNY prize for deal with NYC Health + Hospitals
Blackstone's Jonathan Gray and a rendering of 350 Park (Vornado, Blackstone)

Blackstone eyes new 1M sf NYC headquarters

Blackstone eyes new 1M sf NYC headquarters
The legislation from a City Council member introduced a bill to temporarily repeal the commercial rent tax for businesses during the Covid-19 state of emergency. (Getty, iStock)

Commercial rent tax cut introduced in City Council

Commercial rent tax cut introduced in City Council
Michael Rudder, James Nelson, 141 Wooster Street and 633 Third Avenue (Google Maps)

The Outlook: Industry experts break down Manhattan’s office condo market

The Outlook: Industry experts break down Manhattan’s office condo market
Peter Nicoletti and Colliers' David Amsterdam

Colliers taps JLL’s Peter Nicoletti to lead capital markets

Colliers taps JLL’s Peter Nicoletti to lead capital markets
City Council member Keith Powers (Getty)

Pol, biz groups: Suspend rent tax, extend outdoor dining

Pol, biz groups: Suspend rent tax, extend outdoor dining
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...