CVC invests £250m in Away Resorts
UK: Private equity firm CVC Capital Partners has invested £250 million in UK holiday park operator Away Resorts to secure a majority stake in the business.
According to sources close to the transaction, the investment is close to four times the amount invested by buyout firm Freshstream in 2019.
Away Resorts founder and chief executive, Carl Castledine, said the negotiations had only taken “a couple of weeks in reality”.
The news comes a matter of weeks after the UK Government strengthened its restrictions on international travel by placing more countries on red or amber lists, which enforce quarantine for travellers on arrival back into the country. As a result, holiday park and cottage companies have seen a surge in demand for short-term breaks and staycations, piquing interest from private equity firms, as domestic travellers seek stress-free trips instead of venturing abroad.
Bourne Leisure, the owner of seaside resort company Butlin’s, was acquired by private equity investment firm Blackstone in January, in a deal that valued the company at around £3 billion. Sky News has also reported that fellow holiday park operators, Park Holidays and Verdant Leisure, have been put up for sale.
Likewise, M&A activity has accelerated over the last year as the space consolidates to cater to rising demand for domestic holidays.
Along with Away Resorts buying St Ives Bay Holiday Park in March and Park Holiday acquiring competitor Bridge Leisure in April, vacation rental and holiday resorts company, Awaze, has added more than 1000 new holiday homes to its portfolio with the acquisition of Amberley House and Portscatho Holidays in the UK and Bornholmtours in Denmark.
Last week, however, Awaze announced it would be selling around 100 parks under the Landal GreenParks name to Dutch holiday park operator Roompot, the second largest provider in Europe, for an undisclosed sum. Last year, private equity firm KKR confirmed its purchase of Roompot from PAI Partners for $1.12 billion [€1 billion].
Nick Varney, chief executive of Legoland owner Merlin Entertainments, told The Financial Times that his group was also “heavily investing” in accommodating short-term breaks.
The Away Resorts transaction is expected to close later in the year. Rothschild & Co advised Freshstream on the sale.