Portfolio: Private Equity: Exit

Sleeperz Hotels

Raising growth capital?

In July 2010, Connection Capital invested alongside existing shareholders in Sleeperz Hotels. The investment, alongside bank debt, totalled £6.8m and was used to develop the company’s second hotel in Newcastle.

Investment highlights

  • Date of investmentJuly 2010
  • SectorLeisure & Hospitality
  • Investment typeGrowth Capital
  • Investment size£1.2m
  • Revenue£1.2m
  • EBITDA£0.5m
  • Employees30
  • StatusLive

The company

Sleeperz is an operator of stylish budget/boutique hotels built in prime city centre locations. CEO, David Myers, describes his challenger brand concept as ‘The Mini’ of the UK hotel market. At the time of the investment it had a single site in Cardiff.

Investment rationale

It was clear that Sleeperz was run by a highly experienced management team with a balance of growth ambitions and a disciplined approach to site appraisal. It had developed a successful hotel format with valuable long leases, which provided good long term income. There was a clear roll out opportunity of further distinctive budget/boutique hotels, to build an chain of differentiated revenue and profit generating assets.

Progress since investment

Sleeperz has successfully opened four new sites since our initial investment completed, taking the total to five sites. These are located in Cardiff, Newcastle, Dundee and two in Edinburgh. Together, the sites generate £8m of revenue and there is a solid pipeline for further expansion.

To support the growth an experienced CFO was brought in to support the CEO and enhance the management team.

Covid has clearly impacted the UK hospitality trade, not least through sustained periods of closure. A series of quick and decisive actions have enabled the business to navigated its way through so far.

"I liked the people [at Connection Capital] – they understood the business, the risk and the cycle."

David Myers, CEO, Sleeperz

The company has come a long way since our initial investment and it was sold to MacTaggart Family and Partners in May 2022. The investment, although long proved fruitful with clients receiving 2x return on their investment.

Sleeperz deal team

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View full SME Investment Team

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