The 78-bedroom hotel and conference centre was sold by the De Vere Group earlier this month as part of its on-going plans to dispose of its non-core hotels to focus on the expansion of the Village and golf-focused Venues brands.
According to property agent Savills, Prestige Hotel Management paid in excess of the £1.95m guide price to take control of the Peebles property on the Scottish Borders.
Following a £400k refurb, which saw the addition of new bedroom suites and leisure facilities, the hotel will be managed by its new owners and will reopen before the end of October under the mid-scale brand Mercure after a franchise agreement was agreed with Accor.
"We have worked hard to refurbish the hotel, keeping its traditional Scottish baronial features but incorporating a modern, contemporary design and additional facilities," John Shevlin, operations director for Prestige Hotel Management at Barony Castle, said.
"We are really excited about the new look for the hotel. I have previously managed a Mercure hotel in Aberdeen so I know the brand extremely well and we are looking forward to being part of the Mercure network."
The 15th Century building, which has been a hotel since 1926, features a mini-gym, indoor pool, spa and sauna plus a football pitch and rope course outside.
The reopening follows the decision by the De Vere Group to dispose of a number of its non-core hotels to focus on venues with golf facilities and its expanding Village brand.
Accor meanwhile has committed to grow its Mercure concept in the UK with a target of 75 sites by 2015 - the majority of which will be operated under franchise or management agreements.
Jonathan Sheard, managing director of operations for MGallery and Mercure Hotels in the UK and Ireland, said: “We believe that Mercure Eddleston Barony Castle Hotel and Spa has the quality and ethos to thrive as part of the Mercure brand."
"All the people involved are passionate about the hotel and the local area. The castle has kept its traditional feel whilst the refurbishment brings it up to date with all the modern facilities guests need. We are very pleased to add this hotel to our fast growing network of mid-scale hotels."
Earlier this year Sheard spoke exclusively to BigHospitality for a video interview on his plans for the Mercure and MGallery brands and on his thoughts on the industry as a whole.