Hospitality management company Davidson Hospitality Group has entered into a new partnership with Nautic Partners, a middle-market private equity firm. As part of this partnership, Nautic Partners will acquire Davidson from an affiliate of KSL Capital Partners LLC, in partnership with Davidson management.

Davidson Hospitality Group has more than $2 billion in annual revenue under management and ranks fourth in both gross annual revenue per room and gross annual revenue per property among third-party hotel managers, as reported by Hotel Business in April.

“We are thrilled to embark on this new chapter with Nautic Partners,” said Thom Geshay, CEO/president, Davidson Hospitality Group. “Nautic’s commitment to supporting the long-term growth and success of its portfolio companies aligns perfectly with our strategic vision. We are confident that their partnership will enable us to continue delivering exceptional hospitality experiences while exploring new opportunities for expansion and growth.”

Nautic Partners pursues a “thematic and proactive” investment strategy to partner with executive talent in specific sub-sectors within the healthcare, industrials and services industries. The firm recently held a final closing on its most recent private equity vehicle, Nautic Partners XI, a $4.5 billion fund. Nautic’s investment in Davidson Hospitality Group represents a strategic expansion into the hospitality sector. The investment builds upon Nautic’s previous sector experience in third-party property management, facilities management and corporate lodging services.

“Nautic Partners is committed to supporting Davidson’s management team in achieving its long-term strategic objectives,” said Mark Perlberg, managing director, Nautic Partners. “We believe in the strength of Davidson’s vertically focused operating model and are excited to partner with the team to drive continued growth and success.”

John Ege, partner, KSL Capital Partners, stated, “Nearly a decade ago, we set out to partner with a management company that not only shared a similar operating philosophy to our own, but a similar set of values. We are proud of our successful partnership with Davidson. The company’s growth and success during our ownership has been more than impressive and is a testament to the strength of the Davidson platform. We are confident that Davidson is in the right hands with Nautic as Davidson looks to its next phase of growth. Through management of a number of our existing assets, Davidson remains an important management partner to KSL. We look forward to continuing to work with Davidson on both our existing portfolio and on future projects.”

Moelis & Company LLC is serving as financial advisor to Davidson Hospitality Group and Davis Graham and Stubbs LLP are serving as legal counsel. Locke Lord LLP and Kirkland & Ellis LLP are serving as legal counsel to Nautic Partners.

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