Vacasa to go public at $4.5bn valuation via SPAC merger

US: Portland-based vacation rental management platform Vacasa has announced that it has entered into an agreement to become a publicly traded company through a business merger with special purpose acquisition company [SPAC] TPG Pace Solutions. 

Upon closure of the transaction, the combined company is expected to trade publicly under the ticker symbol ‘VCSA’ and earn Vacasa a pro forma equity valuation of approximately $4.5 billion. The business will receive $485 million in fresh funding which it plans to use to stimulate future growth.

The transaction is envisaged to be completed “as soon as practicable”, according to a press release.

Vacasa CEO Matt Roberts said: “Vacasa is reimagining the vacation rental experience through our end-to-end technology platform. The integration of our purpose-built technology with our local, expert service teams brings exceptional care and greater returns to our homeowners, delivers a consistent and reliable experience to our guests, and helps us offer a large supply of professionally managed homes for our distribution partners.

“As more second homeowners share their homes with guests for the first time, and travellers increasingly prefer to stay at vacation rentals, we believe our partnership with TPG Pace Solutions will help accelerate our growth and the enhancement of our technology offerings for homeowners and guests,” he added.

TPG Pace Group, the permanent capital platform for TPG, has built up a track record of supporting companies that are well-positioned to go public. To date, TPG Pace Group has sponsored seven SPACs.

Karl Peterson, non-executive chairman and director of TPG Pace Solutions, and managing partner of TPG PACE Group, will join the Vacasa board of directors at the closure of the business combination.

He said: “Vacasa has established a strong strategic position in a large, fragmented market, providing the company with powerful tailwinds for growth. TPG has a long history of supporting high-growth companies, including consumer internet marketplaces, and new economy travel and leisure businesses.

“Leveraging our extensive public market experience, we believe our partnership will further solidify Vacasa as a scaled hospitality brand in vacation rentals. We’re excited to work with Matt and the entire Vacasa team as we transition the company to the public equity marketplace,” he added.

Joerg Adams, managing director at Silver Lake, and a member of Vacasa’s board of directors, said: “The team at Vacasa has shown an ability to drive rapid growth by transforming the vacation rental experience. We believe the company’s differentiating investments in technology and automation will further improve efficiency and enhance the experience of both vacation homeowners and guests.”

In 2021, Vacasa estimates its gross booking value to be worth approximately $1.6 billion on five million nights sold. The company forecasts a revenue CAGR of 31 per cent from 2021 to 2023, with revenue growing from $757 million in 2021 to $1.3 billion by 2023.

Vacasa is the latest in a growing list of startups and firms joining the SPAC boom, with many seeing it as a more time-efficient and less risky route to the public markets than a traditional public offering [IPO] through the banks.

Last year, it emerged that Airbnb was approached about a potential merger with a SPAC led by billionaire Bill Ackman before going public via an IPO in December. This year, short-term lodging company Sonder will go public via a SPAC merger at a $2.2 billion valuation, vacation rental distribution channel and metasearch engine, HomeToGo, is merging with Lakestar SPAC I in a €1.2 billion [$1.41 billion] transaction, and private travel club Inspirato is set to go public in a $1.1 billion SPAC merger with Thayer Ventures.

In April, Vacasa completed a major acquisition with the purchase of TurnKey Vacation Rentals’ 6,000-strong premium home portfolio, taking the company’s inventory to 30,000 homes throughout North America, Belize and Costa Rica.

The firm is investing significantly in solutions designed to simplify the vacation rental ownership process for owners, as well as increase its professionally managed inventory in order to deliver even higher levels of customer service and value.

Vacasa has been rumoured to be preparing to go public since at least 2018, when the company moved into a 61,000-square-foot headquarters in Portland’s Pearl District, which has since been put up for sale due to the Covid-19 pandemic.

Prior to this latest transaction, Vacasa had raised around $630 million in funding, including a $108 million Series D round which concluded last June. The financing was led by existing investor Silver Lake, which also supported investment rounds in Airbnb and Expedia during the pandemic as bookings came to an abrupt standstill in March 2020.

The vacation rental management company was itself hit hard initially by the pandemic and ensuing restrictions on travel, as it was forced to lay off an unspecified number of employees last March, believed to be in the hundreds, in order to “preserve the longevity of the business”.