M&A News: Hilton Expands NoMad Hotels Brand
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M&A News: Hilton Expands NoMad Hotels Brand

Story Highlights

Hilton has acquired a controlling interest in Sydell Group, the name behind the NoMad Hotels brand. The deal marks Hilton’s foray into the luxury lifestyle hotel market.

Hospitality giant, Hilton Worldwide (NYSE:HLT), has acquired a majority interest in Sydell Group to expand the NoMad Hotels brand across high-end markets globally. The strategic move comes on the heels of Hilton’s push into college towns with its recent acquisition of Graduate Hotels.

Entry Into a New Market

The transaction with Sydell marks Hilton’s entry into the luxury lifestyle hotel market; it plans to expand the NoMad brand from its flagship location in London to markets worldwide. While Hilton intends to integrate the NoMad brand into its commercial platforms, all NoMad properties will remain under independent ownership.

Furthermore, Sydell will oversee the design, branding, and management of the NoMad brand, whereas Hilton will be responsible for development. Sydell’s portfolio includes seven brands such as The Line, Freehand, The Ned, and The NoMad. Notably, Hilton envisions developing up to 100 NoMad properties globally, with discussions for nearly 10 locations currently at advanced stages.

The Bigger Picture

Last month, Hilton announced the acquisition of the Graduate Hotels brand. Graduate is known for its presence near college campuses, and Hilton sees Graduate’s addressable market at around 400-500 hotels globally. Moreover, Hilton expects its inventory of luxury properties to rise to 600-700 locations over the coming years. Its current portfolio comprises over 7,500 properties and nearly 1.2 million rooms.

Is HLT Stock a Good Buy?

Hilton’s stock price has soared by nearly 51% over the past year. Overall, the Street has a Moderate Buy consensus rating on Hilton Worldwide, alongside an average HLT price target of $209.17. This indicates the stock may be hovering at fair valuation levels at present.

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