Morgans Hotel Group Closes Purchase of Vegas-Based The Light Group

Purchasing the Light Group

via pr Newswire
NEW YORK, Nov. 30, 2011 /PRNewswire/ — Morgans Hotel Group Co. (NASDAQ: MHGC) (“Morgans” or the “Company”), today announced that it has closed on its purchase of a 90% controlling interest in The Light Group (“TLG”), a leading lifestyle food and beverage company currently operating numerous venues for MGM Resorts International (“MGM”). 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.

TLG is a leading hospitality management company with a ten-year track record of delivering cutting-edge food and beverage experiences at world class properties. TLG operates numerous venues in Las Vegas pursuant to management agreements with MGM, including nightclubs, such as The Bank Nightclub at Bellagio Hotel and Casino and Haze at ARIA Resort and Casino at CityCenter, restaurants, such as Yellowtail Japanese Restaurant & Lounge at Bellagio Hotel and Casino and Diablos Mexican Cantina at Monte Carlo Hotel, pool lounges and bars.

Total consideration for the acquisition is approximately $46.5 million, of which $28.5 million was paid in cash. 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 convertible notes that bear interest at 8%, mature four years from the date of closing and are convertible into shares of the Company at $9.50 per share.

About Morgans Hotel Group

Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano in Turkey, a Mondrian in Doha, Qatar, and a Mondrian in Nassau, The Bahamas, and a hotel in New York to be branded with one of MHG’s existing brands. Morgans also owns a 90% controlling interest in The Light Group, a leading lifestyle food and beverage company. For more information please visit www.morganshotelgroup.com.