The sale of Jurys Inn by U.S. private equity firm Lone Star—expected for much of this year—happened this week and will significantly expand the footprints of new owners Pandox AB and Fattal Hotels, across the United Kingdom and Ireland.

Under the terms of the 14 December deal, the Sweden-based Pandox, with Israel-based Fattal Hotels, acquired the 37-hotel portfolio for a total acquisition price of £800 million ($1.1 billion).

Pandox will retain ownership of 20 of the 36 Jurys Inn hotels in the portfolio. Fattal, as owner of the operations platform, will manage all 36 of the Jurys Inn hotels via long-term lease agreements. No plans have been announced regarding any changes to the properties’ Jurys Inn branding.

The one non-Jurys Inn asset in the Lone Star portfolio, a Hilton Garden Inn at Heathrow Airport, was a former Jurys Inn. Pandox will own that property and continue to operate it under the Hilton Garden Inn flag.

On the operations side of the Jurys Inn portfolio, 15 hotels are leases with existing third-party landlords* and 20 are leases with Pandox. One Jurys property, in Prague, will see Fattal work solely with a third party.

The deal sees Pandox’s assets rise from 122 to 159. All the Jurys Inn assets are in the U.K., with the exception of four in Ireland and the aforementioned one in the Czech Republic. There also was no debt sitting on the deal.

Anders Nissen, Pandox’s CEO, told Hotel News Now that the deal fits in perfectly with its overall strategy and gives Pandox a very strong base in the U.K.

The deal also does that for Leonardo.

Fattal Hotels now has more than 150 hotels across five brands in 14 countries, with most located in Europe and Israel.

“The U.K. is a very strong market, and the deal gives us an excellent combination of international and domestic demand in the upper mid-market, full-service segment, which we like. It is also a lease model, and we see in the deal very great potential,” Nissen said.

“The lease model is our favorite, but we also operate. The agreement with Fattal is important in such a big deal in a new country,” Nissen said.

Other commentators such as Russell Kett, chairman of hotel-industry advisory HVS London, have praised Pandox’s choice of operating company.

“The idea of getting into bed with Fattal also is potentially a good-for-both move. It helps Leonardo obtain a platform in the U.K. and Ireland, and it makes its presence there as prominent as it is in Germany,” Kett said.

Kett said Pandox’s Nissen and Fattal Hotels’ owner David Fattal are similar types.

“They are both personally driven and looking at spectacular growth. A deal as large as this should not happen with a total stranger,” Kett said, referring to Fattal’s existing operation of 18 Pandox hotels in Germany.

Nissen evidently agrees.

“Fattal is a company that can move as quickly as we can. It has a strong productivity focus, which sometimes is more important than revenue in that they can pay their rent,” Nissen said.

“Some brands have higher revenue, but nothing is left. Fattal has the entrepreneurial style, the inspiration and good management to take the portfolio to a new level,” Nissen said, who added Pandox before the deal only had one property in the U.K. and that only since this summer.

“What also is important for us is the diversification of our hotels in terms of their rental markets. The cycle moves differently in different markets. At the moment, Scandinavia is too expensive, but not so long ago it was one of the cheapest. That can change again,” Nissen said.

Nissen added that the Lone Star deal will be managed from Stockholm, with the executive with responsibility for it spending three or four days a week in the U.K.

Tom Page, head of hotels and leisure at law firm CMS, which advised Fattal on the deal, agreed the two companies were underexposed in the U.K. and Ireland but did not know if the pound sterling currency weakness played a part in the deal.

Page said what made the deal more attractive to Pandox and Fattal was the ability of the partnership to purchase the assets on a lease multiple with a lower yield. He said most other bidders probably would have different business models, which would have come with more uncertainty.

“The combination allowed them to get leasing yield pricing and outbid others. (Pandox and Fattal is) also quite a big group but with few other interests in the market that would have triggered competition concerns, and such concerns, of course, would have been less attractive for Lone Star.** They had a sweet spot,” Page said.

Lone Star bought the portfolio in January 2015 for £680 million ($1 billion at the time) and both trimmed and consolidated it under management company Amaris and its CEO John Brennan, who is to remain at the company.

Kett said the deal bodes well for the British and Irish hotel industry.

“It is not just one hotel. This is a major group that is changing hands, and we are always interested in those. (The deal) confirms the fact that investors are very interested in obtaining assets in (the U.K.) and Ireland,” Kett said.

“It is a continuation of interest and confirms what people such as I have been saying. There is a lot of interest, money and people wanting to deal. Every deal has 20 or 30 interested parties, and those not successful this time will be inclined to look at other stuff. That is encouraging,” Kett said.

“(Nissen) is a wonderful character. He has more than most been pushing (Pandox) to greater success. He is a very active owner, a proactive owner. I feel the company is in good hands, with him and his team in place,” Kett added.

No word has arisen as to what changes might be made to the portfolio and brands.

“The purchase comes with its own existing operational platform, so there is no need to develop expertise immediately. It could run by itself. Cost savings will come with integration and distribution platforms, but with time. But on day one, it is fine. The only risk is that it runs as it runs today, and the upside will be notable,” CMS’ Page said.

Page also mentioned that Fattal contributed £120 million ($161.15 million) to the Lone Star deal and Pandox on 15 December raised a further £130 million ($174.58 million) in a share issue.

Fattal and Pandox’s contributions and share initiatives, there being no debt on the deal and raised, traditional bank debt has permitted Pandox to bid for the deal without recourse to a single source, Page said.

“Pandox and Fattal already has a working relationship, and this deal is modeled on what they have done in Germany, which gave them a confidence level of trust, understanding and agreement as how the lease structuring was to be done,” Page said.

Page also added that Pandox/Fattal* had only received exclusivity on the deal a little more than a month ago.

CMS also had helped Lone Star dispose of its Atlas portfolio.

“That did cause a little complication, but everyone was pragmatic in practice,” Page said.

*Correction, 18 December 2017: A previous version of this story included two factual errors on the nature of the deal.

**Correction, 18 December 2017: This story has been updated to correct a spelling error.