New company acquires Initial Style Conferences

The Alternative Hotel Group, a newly formed hospitality investment company, has agreed terms to acquire Rentokil's training and conference business, Initial Style Conferences, for £325m cash. AHG comprises a group of investors, led by Richard Balfour-Lynn and other MWB directors acting in their private capacity, and partnering with Bank of Scotland which is a 50% shareholder in AHG. Bank of Scotland is also providing financing for the acquisition ISC is the UK's largest owner and operator of residential conference and training centres. It comprises a total of 29 venues on 24 sites, of which 16 are owned freehold, four are leased and a further four are managed on behalf of major corporate customers. ISC is expected to generate revenues of around £88m and produce an EBITDA of £30.7m for 2005. The market for training and conference facilities has grown enormously over the last five years and many corporate customers are now outsourcing their requirements. This is reflected in ISC's recent agreement to build a new residential specialist training facility for BMW close to Reading, on which the car manufacturer has signed a long term contract. ISC works with major blue-chip customers including: BP, IBM, KPMG, PWC, and Vodafone, as well as Government services such as National School of Government and Scottish Ambulance Service together with many other smaller national and private companies. Richard Balfour-Lynn said: "This is a very exciting opportunity to partner with Bank of Scotland to support ISC's existing operational management team and work with them to expand this highly cash generative property rich business. We believe ISC will benefit hugely from AHG's strategic expertise combined with its property asset management, hospitality and branding skills. "We believe there is considerable scope to grow ISC both organically and through acquisition. AHG's investors have extensive experience within the hospitality, leisure and serviced office sectors." Phil Strachan, Director of Joint Ventures at Bank of Scotland Corporate, commented: "We are delighted to build on our long-standing relationship with the management team by investing alongside them and supporting the acquisition through our 'integrated funding solution'. They are a great team and we look forward to working with them as they develop and grow the Initial Style business."

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