Blackstone to sell Butlin’s to Bourne Leisure co-founders for £300m

UK: Alternative investment management firm Blackstone has agreed to sell British seaside resort chain Butlin’s to the co-founders of holiday home ownership company Bourne Leisure, a newly formed firm backed by the Harris family.

The Harris family, which co-founded Bourne Leisure in the 1960s, are buying back the operating business of Butlin’s, just a year and a half after they sold the Bourne Leisure portfolio to Blackstone for a reported £3 billion.

Bourne Leisure originally bought Butlin’s in 2000 and the Harris family retained a minority stake in the Bourne chain once the Blackstone deal went through early last year.

In July, private pension fund Universities Superannuation Scheme announced that it was buying Butlin’s underlying real estate assets in a £300 million transaction.

Founded in 1936 by Billy Butlin, Butlin’s opened its first site in Skegness with the aim of revolutionising British seaside holidays and providing a “place of colour and happiness” to be enjoyed by all. Today, it operates three resorts in Minehead, Bognor Regis and the original site in Skegness which together attract over 1.5 million guests every year, though in its pomp, the chain operated nine sites across the UK.

Upon completion of the transaction, Bourne Leisure will also continue to operate its two heritage brands, Haven and Warner Leisure Hotels.

Haven is among the largest UK caravan operators with 41 holiday parks and a reported 2.7 million visitors a year. Following a period of large scale investment, Haven added its first new park in seven years in February with Richmond Holiday Park in Skegness,  which will open as a Haven destination in 2023.

Meanwhile, UK hotel chain Warner caters exclusively for adults, with the recently refurbished Studley Castle, newly reopened Heythrop Park and recently acquired Runnymede Hotel in London among its flagship hotels.

Lionel Assant, European head of private equity, Blackstone, said: “Staying true to our high-conviction investment approach, we believe we are well positioned to drive the continued success of both the Haven and Warner businesses. Proceeds from the Butlin’s sale will enable us to continue delivering our ambitious investment programmes across both brands, supporting upgrades to the existing estates and adding new sites to the portfolio, to the benefit of millions of customers.

“Butlin’s is in a strong position to take advantage of the continued growth in the staycation market, and I have no doubt it will continue to flourish. We wish everyone there every success for the future,” he added.

Paul Harris, on behalf of the Harris Family Trusts, said: “We are delighted to reaffirm our love for Butlin’s and once again be the new owners of this great brand. We look forward to working alongside the Butlin’s leadership team as they strive to deliver their strategic plan for the business and help them accelerate their investment plans to give our Butlin’s guests an even better holiday experience.” 

Paul Flaum, Group chief executive officer of Bourne Leisure, said: “I am immensely proud of what Butlin’s has achieved over the past few years, continuing to deliver Billy Butlin’s vision of family fun. It has been a privilege to work with the Butlin’s management team and I would like to thank both the Bourne and Butlin’s teams for their commitment and contribution to this great British institution over so many years. We wish the whole Butlin’s team the very best of luck.

“Everyone at Bourne is now excited to focus on developing and growing our brilliant Haven and Warner brands. We have a tremendous opportunity, building on our success to date and working together with Blackstone, to create the most loved holiday and holiday home brands in the UK.

“I’d like to thank all the teams in Bourne, Haven and Warner for their outstanding commitment and ongoing support in delivering our Bourne mission, to give our Warner and Haven guests and holiday homeowners a great time with memories that last a lifetime,” he added.

The domestic self-catering holiday sector has been boosted by another unprecedented summer of bookings, with many families and groups looking to travel domestically once again for their holidays as the reality of the cost of living crisis bites and uncertainty lingers over disruption to international travel plans.

That, in turn, has attracted a raft of private equity and real estate investors to the British domestic holiday market. Among those linked with a swoop for Butlin’s earlier this year included Terra Firma Capital Partners, Queensgate, Bain Capital, Epiris and TDR Capital.

Meanwhile, US-based real estate investment trust Sun Communities bought UK holiday park operators Park Holidays UK and Park Leisure for £950 million and £182 million respectively, and private equity firm CVC Capital Partners bought a majority stake in Away Resorts for £250 million. Last August, Away Resorts merged with Aria Resorts to create a combined ‘staycation powerhouse’ to further capitalise on the domestic travel boom.

That investor interest undoubtedly remains, although volatile market conditions have made it harder to secure large quantities of debt financing, according to Sky News.

Holiday park group Parkdean Resorts, regarded as the largest UK operator of holiday parks, campsites and glamping sites, caravan parks, lodges and cabins, was put up for sale in 2021 by Canadian investment firm Onex Corporation, which purchased the company in 2016 for a fee in the region of £1.35 billion. Despite rumoured interest from Blackstone, a prospective sale fell through two months after a six-month auction came to nothing.