FBD Hotels, which is owned by the investment company Farmer Business Developments, has bought the Heritage Hotel and Spa in Co Laois in a deal close to €9m. FBD Hotels will take control of the Heritage Hotel from January 2019.

Situated in Killenard, Co Laois, the Heritage Hotel will be the first five-star hotel bought by FBD Hotels, which also owns the Castleknock Hotel in Dublin and Faithlegg House Hotel in Waterford, as well as two resorts located in Spain.

The Heritage Hotel has 98 rooms, including 13 luxury suites, and comes with a health spa and wedding conference and banqueting centre.

Speaking to the Irish Farmers Journal, FBD Hotels CEO David Kelly said the deal for the Heritage was at the right price point for the group.

“The Heritage Hotel is an acquisition that suits us. The total cost is a little over €9m including stamp duty, but we’ve a lot of headroom within our balance sheet for this deal,” said Kelly.

“The net asset value of our balance sheet is currently €190m so this deal represents just 5% of the value of our existing portfolio. The deal will be financed on a mixture of equity and debt but this is not something that is going to impact on returns to Farmer Business Developments,” he added.

At a sale price of close to €9m, FBD Hotels is acquiring the Heritage at a rate of €90,000/room, which Kelly describes as good value in the current market.

“The Heritage had sales of €7m last year but I’m very confident we can build on these sales through our e-commerce and marketing expertise. We think we can get a lot more from the brand,” said Kelly.

The FBD Hotels boss plans to build occupancy and room rates at the Heritage and is targeting an earnings (EBITDA) margin of 20% in time, which would deliver earnings of €1.5m per annum based on the current turnover.