The Carlyle Group, one of the earliest international private equity funds in China, said its Carlyle Asian Partners III purchased 49% of Mandarin Hotel Holdings Ltd, becoming its largest shareholder. Carlyle did not disclose how much it paid for the stake.
Mandarin Hotel operates Orange Hotel, a rising industry player that offers medium to high-end hospitality services in China.
The deal gives Carlyle access to Crystal Orange Hotel, Mandarin Hotel's top brand. Crystal Orange Hotel currently has six locations nationwide.
Carlyle said it expects the acquisition to pay off as China's consumer spending grows rapidly as a result of a ballooning middle class.
Orange Hotel will take advantage of Carlyle's global network and experience to boost its reputation, improve its services and professionalize its staff, Orange Hotel founder Wu Hai said.
Orange Hotel previously received $30 million in 2006 and $20 million in 2009 in venture capital funding.
This is not the first time Carlyle has invested in China's hospitality sector. It invested $8 million in 2000 in Ctrip.com International Ltd (Nasdaq: CTRP), China's largest online travel service provider, which was then in its infancy; and $100 million in New Century Tourism Group in 2008. Both investments were made against a lackluster market.
Overall, Carlyle has invested in more than 60 projects in China, with a total amount of $4 billion.