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Three Hills announces new investment into Castellet Hospitality

21 October 2022 Portfolio Insights

Three Hills Capital Partners (“THCP”) is pleased to announce a new investment in Castellet Hospitality (“Castellet” or the “Company”), a rapidly growing, resilient, budget hotel group headquartered in Marseille. THCP has invested a total of €61.5 million of preferred capital primarily to support Castellet’s buy-and-build strategy. The transaction sees THCP partner with French family office Sofival, bringing additional funding and expertise to the deal as existing owners of another hotel group. The deal marks the first investment from THCP’s fourth fund, a continuation of its investment strategy of providing tailored capital solutions to high-quality European mid-market companies led by outstanding entrepreneurs. Furthermore, it also represents THCP’s first transaction in France, after more than two years of franchise building in the market. 

Founded by CEO Gilles Larrivé in 2017 and operating across the South-East of France, Castellet is a portfolio of 22 budget and midscale hotels, four of which were acquired as part of the transaction, mostly operating under the Accor, Louvre Hotel Group, Marriott and B&B Hotel franchise brands. With more than 20 years’ experience in the hotel industry, Mr Larrivé has replicated his prior success at Castellet, establishing a robust hospitality business operating in the most resilient segment of the market. The group’s success to date can be attributable to its high-quality portfolio and operational expertise.  

Thanks to THCP’s funding and operational support, Castellet can continue to pursue its ambitious growth plans and buy-and-build strategy. THCP has made prior investments in the hotel sector, including Borealis and TVHG, and will leverage its experience in partnering with successful operators to support Mr Larrivé and Castellet through its next phase of expansion. 

Victor Benazech, Investment Director at THCP, said:

Castellet Hospitality embodies the characteristics of a typical THCP transaction as it presents the opportunity to support a first-rate business, founded by an experienced entrepreneur with ambitious growth plans. With a strong pipeline of opportunities already in place, we look forward to partnering with Mr Larrivé to support Castellet Hospitality with its M&A strategy and cement its position as the region’s leading hotel group. With our latest fourth fund, we are pleased that we can continue to support entrepreneurs unlock the full growth potential of their business with our flexible funding solutions.

Victor Benazech, Investment Director at THCP

Gilles Larrivé, Founder and CEO of Castellet Hospitality said:

THCP has a deep understanding of the opportunities available in hospitality across European markets. Thanks to the team’s strong expertise in the sector and flexible offering, they were the obvious choice for Castellet Hospitality to partner with as we enter our next phase of expansion. We are grateful to be working alongside a team with ambitions that match our own as we accelerate our long-term buy-and-build growth strategy and continuing identifying development prospects.

Gilles Larrivé, Founder and CEO of Castellet Hospitality

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