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US: Vacation rental property management franchise company Casago is acquiring Portland-based vacation rental management platform Vacasa for a reported $128.6 million.
Under the conditions of the transaction, Casago will buy all of the outstanding shares of Vacasa held by public stockholders at a price of $5.02 per share, subject to adjustment in the merger agreement.
Founded in 2001, Casago currently manages almost 5,000 properties in 72 cities across the United States, Mexico, Costa Rica and the Caribbean, while Vacasa’s portfolio dipped to around 41,000 homes in the United States, Belize, Canada, Costa Rica and Mexico earlier this year.
Together, the two companies said that the merger would create an “unmatched vacation rental management platform, pairing the advantages of an international brand with the personalised care of local management”.
Steve Schwab, founder and CEO of Casago, said: “Casago has always been committed to delivering personalised, locally-empowered service to homeowners, and exceptional experiences to guests. We’re excited to merge with Vacasa, a company that shares our dedication to excellence.
“Together, we will strengthen our ability to deliver consistent service quality on a global scale, leveraging our combined resources and expertise to better serve our homeowners, guests and partners,” he added.
The deal comes at the end of a challenging year for Vacasa, and four months after the firm raised $30 million in an initial senior secured convertible notes financing, with the option for an additional $45 million, to aid its restructuring efforts.
The news was announced as Vacasa reported its Q2 financial results, in which the company reported an 18 per cent year-over-year drop in revenue to $249 million and a net loss which more than doubled to $13 million. In addition, quarterly gross booking value dipped 19 per cent on the equivalent quarter in 2023, driven by a 17 per cent decrease in nights sold.
It carried out its second round of layoffs of the year in May, in which 800 employees – or 13 per cent of the company’s workforce – were made redundant amid a “significant restructuring” of the business. A number of key executives have also departed, including chief operating officer [COO] John “JB” Banczak [now COO of Casago], chief financial officer [CFO] Jamie Cohen, chief commercial officer [CCO] Craig Smith, and chief technology officer [CTO] Jeff Flitton.
Vacasa had gone public on the Nasdaq Global Select Market in December 2021 via a merger with special purpose acquisition company [SPAC] TPG Pace Solutions, raising $340 million in gross cash proceeds in the process and debuting with a valuation of $4.4 billion. Since then, however, its share price plummeted from a high of $203.20 to $4.85 at the time of writing.
Upon completion of the transaction, Vacasa will no longer list on the Nasdaq, and the combined company will become a privately held company.
Vacasa CEO Rob Greyber said: “This merger is a natural next step in Vacasa’s journey over the past year, sharpening our focus on owners, guests, and our local teams that take care of them every day. By combining with Casago, a company that shares our vision of locally-empowered, homeowner-focused property management, we’re accelerating our progress on that path.
“We are pairing national scale with local expertise, empowering entrepreneurial teams to set a new standard in vacation rental property management,” he added.
In addition, proptech platform Roofstock will invest in and provide strategic guidance to the combined company. Existing Vacasa shareholders Silver Lake, Riverwood Capital and Level Equity will retain minority investments in the combined company.
Gary Beasley, co-founder and CEO of Roofstock, said: “We are excited to be a part of what we believe should be the category-defining company in the vacation rental space. This investment is consistent with our mission of expanding beyond our historical focus on long-term single-family rentals to help power the broader residential investment ecosystem for investors large and small.”
Further operational and organisational details are due to be announced in due course. The transaction is expected to close towards the end of Q1 or the early part of Q2 2025.
