The acquisition of the seven-hotel portfolio of the group is also a move into the luxury accommodation sector and will add more than 1,000 rooms in Melbourne, Brisbane and Adelaide to Mantra's rapidly growing inventory.
MTR will fund the acquisition through cash and existing debt facilities and will control the leasehold and management rights across the portfolio.
"The Art Series acquisition is an exciting opportunity for the Mantra Group providing a portfolio acquisition that is well aligned to Mantra Group's core business and expertise while at the same time offering a unique experience for our guests," says Mantra CEO Bob East.
The deal confirmed rumours last week that Mantra was preparing for an acquisition in the domestic accommodation market.
It's expected the Art Series acquisition will contribute approximately $7 million in underlying EBITDA in its first full year of ownership, which includes The Chen, Box Hill, which is expected to open in November 2017 and will be loss making in its first year of ownership.
After this, the portfolio is expected to contribute between $8.5 million and $9 million to underlying EBITDA.
Settlement of the deal is expected to take place in late 2017, and MTR will announce its FY17 results on 29 August.
MTR shares were nearly five per cent higher at $2.84 at around 11.30am (AEST).
Business News Australia
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