Blackstone checking out of Hilton in largest IPO exit of 2013 to date

Yesterday saw the worldwide hotel chain Hilton Hotels file for an IPO, with the preliminary prospectus stating that the group is looking to raise USD 1.25 billion and is expected to complete the listing early in 2014.

While market analysts are stating that this figure could ultimately rise, this still ranks the planned IPO as one of the top five globally to be announced in 2013, and is far and away the largest flotation this year to be offering the company’s private equity shareholders a partial exit from the company.

Hilton Hotels was acquired by the Blackstone Group back in October 2007, a deal which was the fourth largest buy out of 2007 at the time, with BH Hotels, Blackstone’s acquisition vehicle, paying USD 26.00 billion to delist the group. However, as is so often the case, timing is everything and this was a deal which couldn’t possibly have been timed much worse. Within a few months of the acquisition by Blackstone the financial crisis hit, impacting severely on many highly leveraged businesses and the global recession saw revenues hit as corporate travel budgets were slashed.

Blackstone has made considerable efforts in the six years the company has been in its portfolio to increase revenue growth, with over 1,000 franchised or managed hotels being added to the chain. Additionally a clean sweep of the old incumbent management team and the appointment of an industry veteran as chief executive has seen the group survive a torrid start to its life as a PE backed company.