sbe and Cain Hoy announce the recapitalization of sbe and the concurrent launch of S Squared, an equity real estate joint venture, led by Sam Nazarian and Cain Hoy to globalize sbe’s Acclaimed Hospitality Brands through the Acquisition and Development of Properties in Key Cities Around the World, Initially Capitalized by Several Hundred Million Dollars of Equity
Executive Chairman Sam Nazarian Elevates Sam Bakhshandehpour to CEO of as his Second in Command of Global Operations
Cain Hoy’s Henry R. Silverman, M. Ali Rashid, Thomas D. Christopoul and Bakhshandehpour join sbe’s Board of Directors alongside Founding Members Younes Nazarian and David Nazarian
LOS ANGELES–sbe, a leading global hospitality, entertainment and real estate development company, and Cain Hoy Enterprises, today announced a strategic investment partnership following a recapitalization of sbe, which set an enterprise valuation of $350 million for sbe.
In addition to the investment, sbe and Cain Hoy have launched S Squared, an equity real estate joint venture created to fuel the expansion of sbe’s award-winning hotel, casino, residential and restaurant brands through asset acquisition and development. Initial capitalization of the real estate joint venture of more than several hundred million dollars will target assets valued of more than a billion and a half dollars over time. Investors in the recapitalization have also received rights to purchase up to 20% of sbe’s operating parent.
Cain Hoy, a newly formed private investment company funded with permanent capital, was founded by its CEO Henry R. Silverman, most recently Global Head of Real Estate and Infrastructure at Guggenheim Partners.
The partnership also resulted in an expansion of sbe’s Board of Directors. Led by Nazarian and Bakhshandehpour, sbe’s Board of Directors now includes Henry R. Silverman, and Cain Hoy Senior Partners Thomas D. Christopoul and M. Ali Rashid, who join founding board members Younes Nazarian and David Nazarian.
“This is an unprecedented milestone for us. Henry R. Silverman and his team represent transformational partners for the next evolutionary stage of sbe’s development,” said Mr. Nazarian. “Sam Bakhshandehpour has been an invaluable partner and a catalyst for sbe’s growth the past few years, having performed a masterful job in helping me architect the partnership. Having a dedicated equity investment vehicle in the form of S Squared will enable us to dramatically scale our business and acquire, develop and reposition over a billion dollars in assets worldwide.”
“Sam Nazarian and sbe have created a roster of transcendent brands that have established a new category in lifestyle hospitality for today’s global consumer,” added Mr. Silverman. “Our partnership will usher in an entirely new model for integrating entertainment, hospitality and real estate across multiple verticals in global markets.”
S Squared, which will be led by Nazarian as majority owner and Bakhshandehpour and other sbe executives as minority owners, will be equal partners with Cain Hoy on select new real estate development projects. The joint venture will be focused on acquiring and developing assets anchored by sbe’s hotel, residential and hospitality brands in markets worldwide, including London, New York City and Austin as initial target markets for expansion. S Squared will also look to debut new concepts in the luxury residence club arena that connect seamlessly to sbe’s hospitality properties worldwide.
“Together, we will achieve a level of business integration that is unprecedented in the marketplace,” said Mr. Bakhshandehpour. “The combined capabilities of the companies and the industry heavyweights who lead them will position sbe to expand its footprint in a manner that achieves critical mass in the foreseeable future.”
M. Ali Rashid, who led the deal for Cain Hoy added, “Partnering with Nazarian and sbe on the company’s next chapter of growth is something we’re all very excited to accomplish together. We see no limit to our continued success as we extend the global growth of sbe’s unique platform.”
“We look forward to working together with sbe’s talented development team to finance marquis projects under the SLS and other sbe family brands,” added Christopoul.
The recapitalization replaces all of sbe’s institutional lenders including Colony Capital, who exists after a successful investment in the company three years ago.
“sbe’s partnership with Cain Hoy will have a game changing impact on the hospitality and entertainment industries,” said Tom Barrack, Founder, Chairman and CEO of Colony Capital. “Our investment in sbe has been very successful and we look forward to working with Nazarian, sbe and their new partners in evaluating future real estate ventures.”
In 2015, sbe will debut its third corporate location in New York City with teams focused on East Coast, European and Middle Eastern markets. In addition to sbe’s new corporate offices in New York, the company will maintain its Los Angeles offices and their global headquarters in Las Vegas.
