Firmdale, the London boutique hotel chain which counts Halle Berry, Daniel Craig and John Travolta among its guests, has revealed that it has sold a 20% stake in the business to Swedish pharmaceuticals tycoon Lennart Perlhagen.
It is the first time that a significant stake in Firmdale has been sold to an external investor since it was founded in 1985 by husband and wife team Tim and Kit Kemp.
Firmdale's portfolio of eight properties in the capital include the Ham Yard, with a helter skelter-shaped orange squeezer in its bar, and the Charlotte Street Hotel which sits in a 19th century warehouse and has a stone statue of a bull terrier in its lobby.
They were so successful that they were joined by three properties in New York and the combined Firmdale Holdings business generated £17.8 million of operating profit on a record £198.2 million of revenue in the year to 31 January 2024.
Since 2019, the average room rate of its London hotels has increased 47.1% to £562 and this focus on the upper end of the market helped it to fully recover from the pandemic which is when it sold the stake to Perlhagen.
The 82-year-old Swede started out working for the forerunner of Astra-Zeneca and Farmitalia SpA which was acquired by Pfizer.
He went on to set up his own business Cross Pharma and sold it to Swedish company, Meda, where he became a director and grew it from a $10 million valuation to more than $4 billion.
Perlhagen used the proceeds from that to found Novocure which went on to become one of the world's leading cancer treatment companies and is listed on the Nasdaq with a market capitalisation of $2.3 billion. His connection to Firmdale comes through his relative Mona Perlhagen who founded Chelsea Textiles which makes elaborate fabric for the chain's hotels.
Recently-filed documents show that Perlhagen became a Firmdale shareholder in December 2021 with his stake represented on the board by his son Richard who co-founded investment firm Greybull Capital, a former owner of British Steel.
The majority of Perlhagen's stake came from new shares issued by Firmdale which is still controlled by the Kemp family trust. It is notknown how much he paid for the stake but it is thought to be around £300 million.
In 2015 Tim Kemp valued the business at £500 million to £600 million and since then its revenue has doubled, underlying profit has almost trebled and net assets have increased by 60.3% giving the group a value as high as £1.5 billion.
Its worth is set to soar as its latest accounts state that in April 2022 it acquired a long leasehold interest in three adjacent buildings in Bloomsbury which it plans to convert into a “first class hotel”. It isn't stopping there as the accounts add that the group is “actively seeking further development opportunities” in the capital.
Firmdale would not comment.
