The Menzies Hotel Group has been sold to Nikko Principal Investments (NPI), the main finance arm of Nikko Cordial, in a £120m secondary buyout.

The group was founded by former Thistle Hotels executive Nick Menzies in 1992 and its portfolio currently consists of 14 four-star hotels around the UK and in Scotland, totalling over 1,200 bedrooms.

NPI will hold 79 per cent of the equity in the hotel chain with Nick Menzies retaining 16 per cent and the remaining 5 per cent being owned by the senior management.

In the year to 31 January last year, Menzies made an underlying profit of £10.7m, a rise of 22 per cent on the previous year. Turnover also increased 17 per cent to £38.1m while, over the last four years, the group has invested more than £24m on refurbishment and capital improvements to its properties.

Commenting on the deal, Menzies said: “We are delighted to be able to work with Nikko to take the business on to its next level. The UK four-star hotel sector remains fragmented and we believe that there are significant opportunities for us to lead the consolidation of the sector and build value.”

The chief executive of NPI, Brian Berry, added: “Menzies represents an exciting opportunity for Nikko to build a substantial position as an owner/operator of upscale hotels within the UK.

“With our financing expertise and financial resources and the high quality of business and strong management team that Nick has assembled at Menzies, we believe we have acquired an excellent platform from which to achieve this.” Details: www.menzies-hotels.co.uk