Morgans Hotel (MHGC) to Acquire The Light Group in $46.5M Deal
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Morgans Hotel Group Co. (Nasdaq: MHGC) has entered into a definitive agreement to purchase a 90% controlling interest in The Light Group ("TLG"), a leading lifestyle food and beverage company currently operating numerous venues for MGM Resorts International. This acquisition, while being immediately accretive to the Company's earnings, also provides Morgans with a first class food and beverage platform, a creative and experienced management team, and renowned brand names.
Total consideration for the acquisition is approximately $46.5 million, of which $28.5 million will be paid in cash at the close of the transaction. The remaining $18.0 million is subject to the achievement of $18.0 million of EBITDA from TLG's existing business over the 27 months subsequent to the transactions' closing and is represented by a convertible note that bears interest at 8%, matures four years from the date of closing and is convertible into shares of the Company at $9.50 per share.
As part of the transaction, Andrew Sasson, the founder and chairman of TLG, will join the Company's board of directors. Andy Masi will remain as TLG's Chief Executive Officer. The transaction is expected to close in the fourth quarter of 2011, and is subject to customary closing conditions.
Total consideration for the acquisition is approximately $46.5 million, of which $28.5 million will be paid in cash at the close of the transaction. The remaining $18.0 million is subject to the achievement of $18.0 million of EBITDA from TLG's existing business over the 27 months subsequent to the transactions' closing and is represented by a convertible note that bears interest at 8%, matures four years from the date of closing and is convertible into shares of the Company at $9.50 per share.
As part of the transaction, Andrew Sasson, the founder and chairman of TLG, will join the Company's board of directors. Andy Masi will remain as TLG's Chief Executive Officer. The transaction is expected to close in the fourth quarter of 2011, and is subject to customary closing conditions.
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