Axiom deal sign of more to come for Pyramid in Europe

LONDON – Recognizing a substantial opportunity to increase its portfolio in the U.K. and move deeper into western Europe drove Pyramid Global Hospitality last week to merge its European division, Hamilton Pyramid Europe, with London-based Axiom Hospitality, which has a U.K.-heavy 33-property portfolio with north of 5,000 keys.

“We’re going to have the premier independent management company in Europe going forward once we’re fully integrated,” Pyramid Global Chief Investment Officer Chris Devine told Hotel Investment today. “That was a key thesis for this deal – to set us up to be the go-to manager of choice for institutional capital.”

The combined new company has 48 hotels and 8,000-plus keys with Axion delivering more than 20 properties in the U.K. Initially, the two business will continue to operate distinctively and under their own names, according to Devine, who added that similar bolt-on acquisitions should be coming as Pyramid Global targets even wider distribution in western Europe where local knowledge is imperative. Longer term, Pyramid Global likely will look at a rebranding of its European division.

Chris Devine

The deal was relationship driven and Devine would only say Axiom leadership is getting a significant rollover stake in the combined platform.

“What attracted us to the Axion deal was their U.K. platform – they have a big footprint in central London,” Devine continued. “I think they’re actually the largest independent hotel manager in central London.”

Perhaps as important as the assets and increased distribution in the Axiom deal, Devine said, was bringing in its experienced leadership team of Jamie Lamb and Alex Pritchard, especially after the June death of Hamilton Pyramid Europe CEO Frank Croston. Following a period of integration into early 2025, the European business will be led by Lamb and Pritchard and supported by an integrated team from both organizations.

Devine said the 40-strong Axiom corporate team will service the U.K. platform, including five or six Hamilton hotels already in the U.K. The existing Hamilton team will run the EU and greater European platform.

The deal was not underwritten as a synergy-focused opportunity, but like in any combined platform, Devine said there are now two people in a lot of key positions. “There will be some synergies, but it was not a synergies-based deal.

It’s just a different animal here. I think we have a good leg up, but there are formidable competitors out there that I’m sure will follow a similar strategy. So, for us, it’s about the reputation and our relationships, and those are the things that we will leverage to grow in Europe.

Chris Devine

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Local expertise matters

Getting back to growth, Devine said the western European franchise and independent management businesses are about 20 years behind the U.S. and Pyramid Global thinks the same franchise growth dynamics and conversions to independent management is coming to Europe. Better yet for Pyramid, Devine said there is not a lot of competition in the management space – only four or five.

“We’re poised to be able to grow that platform in key markets,” Devine said. “I’d say we have eight key countries, unlike the U.S. where you can go state to state for growth. In Italy or Spain or Portugal, you truly need to have on-the-ground expertise, and to get that expertise you have to do it through M&A.”

So, that is Pyramid Global’s strategy, grow deeper into Europe through bolt-on acquisitions.

“We look at things on a five-year horizon,” Devine added. “So, I would say in the next five years we’ll continue to bolster the platform. Our ultimate goal is for the European platform to look a lot like the U.S. platform in terms of size and scale, number of units, and opportunities for our associates.”

As for competitors with potentially similar aspirations in Europe, Devine said Europe is a little less competitive because the barriers to entry are much higher. “It’s not like you can just start up a management company and move into all these markets. It’s just a different animal here. I think we have a good leg up, but there are formidable competitors out there that I’m sure will follow a similar strategy. So, for us, it’s about the reputation and our relationships, and those are the things that we will leverage to grow in Europe.”