Park Resorts has revealed plans to merge with its rival caravan parks operator Parkdean in a deal worth nearly £1bn including debt.
The merger, which is subject to approval from the Competition and Markets Authority, is the largest transaction in the sector since Bourne Leisure acquired Rank Holidays 15 years ago.
The combined group will have 73 caravan parks, and the deal will trigger a £96m cash payout for Electra Private Equity, which invested in Park Resorts in 2012. Park, chaired by the former Whitbread boss Alan Parker, is the UK’s largest caravan park operator.
Electra, which will still own 45 per cent of the business, said the group would have earnings of £100m a year. To finance the merger with Parkdean, which has been part-owned by rival private equity firm Alchemy Partners since 2006, Electra has agreed a £550m debt facility with Barclays, Royal Bank of Scotland and JP Morgan. The cash payout arises from this refinancing.
Alex Fortescue, the chief investment partner at Electra, said: “What started as an investment in Park Resorts’ senior debt has now become an equity position in a business of real scale and with strong growth prospects in the UK domestic holiday sector.”
Alchemy will also retain an equity stake in the new group.
The pair have little geographical overlap, with Park Resorts strong in the North-west of England, East Anglia, the North-east and the Lake District, while Parkdean concentrates on the South-west and Scotland.Reuse content