According to a Bloomberg article, a private equity cohort led by Carlyle Group and Sequoia Capital, as well as existing shareholders–including the firm’s co-chairmen–have made an offer to take budget hotel chain 7 Days Group (click ticker for report: ) private for $12.70 per share. This is far from the first deal the Carlyle Group’s done in China, as it is also attempting to purchase Focus Media (click ticker for report: ).
7 Days Group is the second largest budget hotel chain in China, and it looks to capitalize on a growing middle class desire for travel. The takeover price of $12.70 is roughly in-line with our fair value of $13. Considering two of the world’s most prominent private equity firms agree with our valuation, this deal speaks to the benefits of discounted cash-flow modeling.