Epiris and Alchemy sell Parkdean to Onex in £1.35bn deal

The sale is anticipated to generate proceeds of £405m for Epiris (until recently known as Electra Partners), which originally invested £70m in the company via three debt-for-equity transactions in 2012. It also brings to an end a decade-long holding period for Alchemy, following a 2006 take-private deal for part of the business.

Onex has made a total equity investment of $750m as part of the deal, according to a statement issued by the Canadian GP, with capital drawn from its $5.15bn fourth fund.

The transaction is the latest in a series of high-profile exits from UK-based portfolio companies to international buyers, coming less than a fortnight after Cinven sold web services provider Host Europe Group to trade buyer GoDaddy for €1.69bn.

The sale comes a year after Epiris and Alchemy merged portfolio companies Park Resorts Group and Parkdean Holidays to form the consolidated group. At the time, the new business had an enterprise value of £960m.

Epiris generated £95m from the 2015 transaction, bringing its total cash proceeds to £109m. The latest transaction will bring its total proceeds from the investment to £515m, equating to a total return multiple of 3.9x and IRR of 46%, according to a statement issued by the vendor.

Under Epiris's tenure, Park Resorts made three bolt-on acquisitions, comprising South Lakeland Parks, Southview holiday park and Manor Park holiday park, prior to the merger with Alchemy-owned Parkdean Holidays. The business has since made a further acquisition via the bolt-on of Vauxhall Holiday Park in Great Yarmouth.

Following the 2015 merger, Alchemy and Epiris each owned a 45% stake in the business.

Under its new ownership model, Parkdean will continue to pursue an acquisitive growth strategy, according to the statement issued by Onex.

According to unquote" sister title Debtwire, Advent International, Fortress Investment Group and Centerbridge had also been in the frame to acquire Parkdean. The sale to Onex is expected to complete in Q1 of 2017, subject to regulatory approval, according to a statement.

According to Debtwire, a number of banks had been lined up to support the various bids for the company, with a variety of packages ranging from one jumbo solo unitranche package to cov-lite senior and second lien structures.

Earlier this month, unquote" took an in-depth look at the growing attraction of PE houses to the UK holiday park sector, following the country's vote to leave the EU.

Previous funding
Electra first invested in Park Resorts in January 2012 in a £45.5m debt-for-equity transaction, which saw it acquire term debt from Lloyds. Later that year, it acquired two further debt packages, bringing its investment in the company to £69.8m.

In May 2015, Electra acquired a further stake in Park Resorts from GI Partners for £25m.

Alchemy took part in the management buyout of Parkdean Holidays in May 2006. The £230m take-private deal gave Alchemy an 80% equity stake, with management owning the remainder.

Company
Founded in 2015 via the merger of Park Resorts and Parkdean Holidays – which were launched in 2001 and 1999 respectively – Parkdean is an operator of holiday parks. The business is dual headquartered in Hemel Hempstead and Newcastle, and operates 73 holiday parks across the UK. Its parks provide accommodation including caravans, chalets, apartments and lodges, as well as camping pitches.

Parkdean has a headcount of around 6,000 during peak holiday season. In 2015, the business generated a turnover of £400.7m with EBITDA of £106.6m, according to publicly available records.

People
Epiris – Alex Fortescue (managing partner); Sarah Williams (investment director). Onex – Tony Morgan (managing director).
Parkdean Resorts – John Waterworth (CEO).

Advisers
Vendor – Rothschild (corporate finance); Clifford Chance (legal).
Equity – Latham & Watkins (legal).
Management – Travers Smith, Adam Orr, Jeremy Dennison, Katie McGarry, James Sherlock (legal).

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• Topics
• Exits
• Buyouts
• UK / Ireland
• Consumer
• United Kingdom
• Electra Partners LLP
• Alchemy Partners LLP
• Onex Partners