Caledonia Investments has agreed terms for the sale of Park Holidays UK, the UK's third largest holiday park operator, to Tiger Bidco, a special purpose vehicle incorporated by Intermediate Capital Group (ICG), for a headline enterprise value of GBP362 million.
Caledonia will receive GBP197 million in cash, net of fees, for the sale of its 81.5 per cent fully diluted equity stake. The net proceeds will be held on deposit for future investment.
The net proceeds represent a premium of 47 per cent to Caledonia's carrying value of Park Holidays at 30 September 2016 of GBP134 million and are in addition to GBP41 million of cumulative distributions that the Caledonia group has received from Park Holidays since it acquired the business in 2013.
Overall, Caledonia will have realised a net IRR of 44 per cent and a money multiple of 2.9x from its investment in Park Holidays.
Park Holidays was originally acquired by Caledonia in November 2013 for a headline valuation of GBP172 million. At that time, Caledonia backed Park Holidays' incumbent senior management team of Jeff Sills (chief executive), Al Loch (chief financial officer), Tony Clish (commercial director) and Adrian Fawcett (non‐executive chairman), all of whom will remain in place following the sale to ICG.
Under Caledonia's ownership, Park Holidays accelerated capital investment across the estate driving further revenue growth in addition to increasing the number of parks it operates from 23 to 26. These actions supported strong growth in profitability with EBITDA expected to be up 79 per cent from GBP20.4 million (for the year ended 31 December 2012) to an estimated GBP36.5 million (for the year ending 31 December 2016).
Completion of the transaction is conditional on the approval of the Financial Conduct Authority which could take up to three months.
Duncan Johnson, Caledonia's head of unquoted investments, says: "Caledonia's unquoted strategy is to invest in leading businesses which combine an ability to grow profits whilst also paying a healthy annual cash return to shareholders. Park Holidays has delivered in every respect and we congratulate Jeff Sills and his team, as well as the company's Chairman, Adrian Fawcett, for their stewardship of the business over the past three years. We wish them and the business every success in the future."
Jeff Sills, chief executive officer of Park Holidays, says: "We were attracted to Caledonia because of its unique investment model. Caledonia has proved to have been a very supportive financial partner over the past three years, which has enabled us both to acquire new sites and improve the quality of our existing estate. We look forward to continuing to deliver good returns for our new investor."
Will Wyatt, chief executive of Caledonia, adds: "Park Holidays has been an outstanding investment for Caledonia and we are delighted with the progress it has made since we became involved in 2013. It exemplifies our ability to find and attract capable management teams and I am delighted that the outcome has been so successful for both us and Jeff Sills and his colleagues."
