• by Thom Forbes  @tforbes, December 16, 2014

InterContinental Hotels Group, the U.K.-based web of 697,048 rooms in more than 4,700 hotels worldwide including brands such as Crowne Plaza, Holiday Inn and Candlewood Suites, is purchasing the Kimpton Hotels & Restaurants chain — “where inspired travel begins” — in the U.S. for $430 million in cash.

Kimpton, which is based in San Francisco and has 60 hotels in 27 cites, will be run as a standalone business but an IHG FAQ webpage about the deal points out that the chain, “together with our successful Hotel Indigo and EVEN Hotels brands, will create a leading boutique and lifestyle hotel business.”

Kimpton, which was launched by investment banker Bill Kimpton in 1981, will continue to be led by Mike DeFrino, currently Kimpton’s COO, according to a statement by IHG CEO Richard Solomons announcing the deal. Current Kimpton CEO Mike Depatie is going to focus on management of the Kimpton real-estate funds. The transaction does not include real estate.

Kimpton “has plans for a further 16 hotels and is expected to double its earnings by the end of 2017,” reports Ashley Armstrong in the Telegraph. “The company also operates 71 restaurants, bars and lounges.”

“IHG is the ideal partner for Kimpton and has absolutely the right experience and specialist capabilities to help the business move to the next phase of rapid growth,” Departie said.

IHG’s Solomons tellsUSA Today’s Nancy Trejos that his company wanted a stake in what he believes to be the fastest-growing segment of the hotel industry, and he expects to expand the brand outside the U.S.

“We're buying this business because of the capability it brings, their brilliance in food and beverage and design," Solomons tell Trejos. “They can really add to our business and we to theirs.”

“IHG has been lacking a material presence in the upper upscale segment and this acquisition fills that void,” according to SunTrust Robinson Humphrey analysts C. Patrick Scholes and Bradford Dalinka, reports the Financial Times’ Elizabeth Paton.

“Until now, IHG had exposure in the luxury segment with the InterContinental brand and the mid-scale segment with Holiday Inn and Holiday Inn Express brands but other than Crowne Plaza, nothing significant in-between. So as far as ‘did the buyer get a good deal here?’ question goes, we believe so.”

“While the boutique sector is highly competitive and fast changing, making it hard to predict which brands will stay on top, some hotel analysts thought the acquisition made sense,” observe Craig Karmin and Dana Mattioli in TheWall Street Journal.

“This is a well-conceived, strategic use of InterContinental’s cash to quickly gain entry to an important lodging sector with a well-established lifestyle brand,” Lodging Advisors CEO Sean Hennessey tells Karmin and Mattioli.

“Kimpton, which runs properties with features such as floor-to-ceiling bookcases and lush velvet drapes in guest suites, was in talks with several possible buyers, according to Solomons,” reports Bloomberg’s Nadja Brandt.

“When you look at all the major hotel companies, IHG is one of the only brands that didn’t have any exposure to the higher-end lifestyle segment,” FBR & Co. analyst Nikhil Bhalla tells Brandt. “It can take quite some time to create a presence in key markets. By buying an established brand name like Kimpton, with many properties under management, IHG can cut its expansion by years.”

IHG’s roots go back to 1777, when William Bass set up a brewery in Burton-on-Trent, England. The company, whose familiar red triangle was the first trademark to be registered in the U.K. (in 1876), bought Holiday Inns International in 1988 — “its first significant international move into the hotel industry,” according to a company timeline. It acquired Holiday Inns International two years later, then launched Holiday Inn Express in 1991.

IHG sold Bass in 2000; is now owned by Anheuser Busch InBev.

Bill Kimpton, an investment banker who helped to take Kentucky Fried Chicken public earlier in his career, also handled the financing for some larger hotels, including the renovation of the Helmsley Palace in New York, according to his 2001 obit by Jane L. Levere in the New York Times. “His philosophy,” according to Levere’s account, “is that travelers ‘are all insecure.’”

“’It's just a matter of degree,’” he once said. “’A hotel should relieve travelers of their insecurity and loneliness. It should make them feel warm and cozy.’”

Which, presumably, is the thinking behind its KarmaRewards program.