Pandox Sells Dalata Hotel Operations at an Underlying Enterprise Value of €500 Million
Key Facts
Pandox completed the sale of Dalata’s hotel operations to Scandic on Nov. 2, based on an underlying enterprise value of €500 million, according to a Pandox statement. The company said the proceeds were used in full to repay financing provided by DNB Bank. Completion of the deal transfers operation of the hotels to Scandic, while Pandox retained the related property business. That business comprises 32 hotels in Ireland and the U.K. Pandox and Scandic entered into new 30-year, revenue-based leases that include a guaranteed minimum rent. The deal therefore combines the sale of the operating business with Pandox continuing to own and lease the properties.
Pandox said the purchase price is based on an underlying enterprise value of €500 million, while the final cash consideration is subject to customary adjustments for cash, debt and working capital. The company used all the proceeds to repay DNB Bank financing, which was listed on its balance sheet among liabilities related to assets held for sale. But the deal did not end the financing obligations for the acquisition of Dalata: €665 million of the acquisition facility remained after the sale. Pandox said it intends to refinance the facility as soon as possible. This puts repayment of the DNB financing alongside the continued need to address the remaining acquisition financing balance. The company’s announcement did not specify a date for completing the refinancing.
Pandox’s future income from the properties is based on the new 30-year leases with Scandic, which are revenue-based and include a guaranteed minimum rent. Pandox said the weighted average unexpired lease term was 17.1 years as of Sept. 30, 2026, including Dalata property leases with Scandic. This figure reflects the impact of the new agreements on the portfolio’s lease-term measure at that date. Under the arrangement, Pandox retained the 32 properties in Ireland and the U.K., while hotel operations transferred to Scandic. Pandox Chief Executive Officer Liia Nõu said the acquisition of Dalata was a "milestone" for the company. She added that the deal demonstrated its ability to execute complex transactions that create value in an international environment.
Dalata’s properties recorded rental income of 357 million Swedish kronor in the third quarter of 2026 and 880 million kronor in the first nine months of the year, according to the Pandox CEO’s commentary on the quarterly results. The company said the properties performed well during the quarter and delivered good profitability. It estimated third-quarter revenue growth for the Dalata portfolio at about 4% in the U.K. and 1% in Ireland, on the assumption of equivalent lease contracts during the comparison period. These figures provide context for the performance of the properties retained by Pandox as management of hotel operations transferred to Scandic. Dalata’s average annual revenue growth from 2019 to 2024 was 9%, according to Scandic when it announced the deal. Scandic said its previous oversight of hotel operations for Pandox had "strengthened its confidence in the business’s potential."
Pandox’s total portfolio comprises 191 hotel properties and about 42,400 rooms in 11 countries in Northern Europe, with a market value of about 97 billion Swedish kronor, according to the company statement. The retained Dalata properties are part of this portfolio after the operating business transferred to the buyer. Scandic said the acquisition was financed with cash and cash equivalents, together with credit facilities under a long-term financing framework announced in July 2026. Scandic began consolidating the acquired operations within its "Other Europe" segment in its financial reporting as of Nov. 2, 2026. The company said further information about the deal, including pro forma financial information, would be presented with its third-quarter interim report. The report is scheduled for publication on Nov. 10, 2026.
Pandox expects major renovations at hotels including Scandic Grand Marina in Helsinki, Clayton Cardiff Lane in Dublin and Clayton St. Andrew’s Square in Edinburgh to have a gradual positive impact on earnings during 2027. It also expects an additional impact near the end of 2027 from renovations at the DoubleTree by Hilton Brussels City. These works are part of the outlook the company presented in its third-quarter results commentary, alongside income and revenue data for Dalata properties. Scandic referred readers to its interim report, scheduled for Nov. 10, 2026, for additional financial details of the deal. The forthcoming disclosure will therefore include the pro forma information the company said it would provide on the acquisition. Pandox said the remaining balance of the acquisition facility would be refinanced as soon as possible, without specifying a date.