Hilton is a publicly traded hotel chain with over 200 properties.
Its stock price has climbed more than 1,000% in the past six years, driven by its high valuation.
The company’s board is comprised of former CEOs of the Hilton Hotels Corporation, the company’s parent company.
But the company is also owned by several private equity firms, which have been investing in Hilton hotels since 2010.
One of the private equity partners that has invested in Hilton is The Carlyle Group, which has had a presence in Hilton for a decade.
Carlyle owns a controlling stake in the company.
When it came to raising money for the Hilton IPO, the Carlyle group did not raise much money, according to sources familiar with the matter.
Instead, they were trying to make the company look good by investing in stock options.
In recent months, the group has been trying to buy up stock options for its own holdings, which is a common tactic for private equity to acquire the company, according a source familiar with Carlyle’s strategy.
According to the source, the new investment in Hilton has also been motivated by its desire to increase the company through stock option purchases.
In February, the Hilton board met with Carlyles management team.
In a closed meeting with investors, Hilton’s board approved the deal.
But there was a snag.
In the event of the deal going through, Carlyle had agreed to sell its stake in Hilton to the Carlyles, and to take a smaller portion of Hilton’s profits.
If Carlyle did not take the smaller portion, Hilton would lose money.
This could have resulted in a major loss for Hilton, according the source familiar on the matter, who spoke to Vice News on condition of anonymity to discuss private investment in a private company.
Instead, Hilton board members decided to go for it.
“The Carlyle investors were a huge part of the decision,” the source said.
“They were really, really keen to see this go through.”
The Carlyles bought a $7.2 million share in Hilton.
This represented $1.7 million in the $11 million that Hilton had invested in stock option exercises, according forbes.
The Carlylles ownership of the stock option exercised $7 million of Hilton stock.
The remaining $3.9 million went to buy another $4 million of stock in Hilton stock, which was valued at $14 million.
This means that Carlyle received $10.3 million for its investment in the stock options exercised by Hilton.
This deal is a victory for the Carlyllas and their partners.
The value of their stake in hotel chains has skyrocketed.
In 2017, Hilton bought $50 million worth of Hilton hotels, and its value has doubled since.
But that’s not the only company that has benefited from Carlyle investing in the hotel industry.
Since 2010, the private investment firm Carlyle Capital has made at least $1 billion on the hotel market.
That includes $500 million in hotel investments by the hotel chains including Marriott, Hilton, and Wyndham.
In January, Carlyles partners in this deal were also the investors in the Hilton purchase.
According to the Hilton press release announcing the deal, Carlylls investment in new Hilton properties was a “game-changer” for Hilton.
In 2016, the hotel chain was valued by Forbes at $19.4 billion, and Carlyle is now valued at nearly $25 billion.
In fact, the deal with Carlyll and Hilton’s investment will see Carlyle become the second-largest hotel investor in the world after Marriott.
Since 2010, Carlyley has also invested in the hospitality industry.
The private equity firm has raised nearly $400 million in venture capital funding and $500m in private equity.
In 2013, Carlylee invested in a company that operates a chain of hotels that includes the Hilton brand.
The Hilton franchisee company had been run by Carlyle for five years, but the company was sold to Marriott.
In 2018, Carlylett was also a co-investor in the development of a new Marriott hotel.
That development is set to open in 2019.
What’s Next for Hilton?
The Carlyllers investment in hotel companies was just the latest in a series of moves by the Carlylases private investment.
Carlyll has also purchased stakes in more than 30 luxury retail stores, including Zara, H&M, and Forever 21.
A source familiar for the deal said that Carlyll’s involvement with the new Hilton deal was also motivated by the desire to expand its reach into the hotel sector.
While the Carlyls investments in Hilton have been significant, the investment in Carlyle will go even further.
In 2019, the two will team up to build the new luxury hotel in downtown Los Angeles, which will be the first hotel to be constructed under the Carlylets umbrella.
And while the Carlyleys private investment into Hilton will bring them to new heights, they will still have to do some leg work