PARIS — AccorHotels is set to acquire a major stake in sbe, a leading lifestyle hospitality company that develops, manages and operates hotels, residences, restaurants and nightclubs.

The hotel group is has signed a Letter of Intent and entered into exclusive negotiations for AccorHotels to acquire a 50% stake in sbe’s common equity held in part by Cain International for US$125 million. Sam Nazarian will continue to own the remaining 50% of sbe.

In addition, AccorHotels will invest $194 million in an new preferred debt instrument that will be used to redeem all existing preferred units, also held in part by Cain International.

In total, AccorHotel’s investment in sbe will amount to $319 million.

“I am delighted to announce this strategic partnership with one of the most innovative Groups in the luxury lifestyle space worldwide. It marks a new step in expanding AccorHotels’ footprint in this fast growing segment in key U.S. cities such as Miami, Los Angeles or Las Vegas, and in other international destinations,” said Sébastien Bazin, Chairman & CEO, AccorHotels. “The new luxury is all about exclusive experiences and incredible lifestyle concepts and sbe brands have the perfect know-how that will complete perfectly the AccorHotels portfolio.”

Nazarian also commented on how this new partnership marks a new milestone in sbe’s history: “This long-term investment by AccorHotels provides sbe, its customers and hotel owners with greater depth and breadth around the world and supports our collective ambition to be the best lifestyle hospitality company in the market.”

Nazarian also noted that the partnership will help accelerate sbe’s growth both domestically in the U.S. and in new international markets, particularly Europe, and allow its core millennial customer base to gain access to the AccorHotels platform. Meanwhile, through this partnership, AccorHotels will expand its current geographic footprint in gateway North American cities such Los Angeles, Miami, Las Vegas and New York with iconic hotels, and play a key role in developing sbe’s luxury brands globally.

sbe hotels will be distributed on the AccorHotels distribution platform, be featured on Accorhotels.com and will be part of the AccorHotels loyalty program.

sbe’s pipeline includes projects in some of the most important global gateway cities such as Atlanta, Chicago, Washington D.C., Dubai, Rio de Janeiro, Mexico City, Cancun, Tokyo and Los Cabos. By the end of 2018 it will operate 25 hotels, comprising 7,498 keys with a majority in North America, 170 award winning restaurants and entertainment venues in global destinations as well as new properties in the Middle East, Asiaand Latin America. It currently has a further 20 hotels and residences around the world in its pipeline, as well as 59 standalone restaurants and nightlife venues. In addition, sbe has sold 1,500 branded residential units valued at $2 billion with over 2,500 units valued at $2.5 billion in its pipeline.

The transaction is subject to regulatory approvals. It should be completed by July 31, 2018.