Phoenix acquires LDC's Forest Holidays

LDC and the company's management team will retain significant minority stakes in the business.

Financial details of the transaction remain undisclosed, though the Sunday Times recently reported the transaction was likely to value Forest Holidays at around the £100m mark. The publication also stated that LDC owned a stake of slightly more than 50% prior to the sale.

Phoenix drew capital from its 2016 fund, which held a final close on £415m in July this year and typically invests in companies with enterprise values of between £30-150m. Forest Holidays generated underlying adjusted EBITD of £10.4m in its most recent financial year, according to publicly available documents.

The acquirer saw off competition from Dutch trade buyer Center Parcs to secure the business, according to various media reports. Private equity firms including Bowmark Capital and Caledonia Investments were reportedly involved in earlier stages of the bidding process.

Since LDC first invested in the company's MBO five years ago, Forest Holidays has added more than 250 cabins across locations in the Forest of Dean, Sherwood Forest and Thorpe Forest. During that period, it has increased its EBITDA from less than £1m to around £10m, according to a statement.

Under its new owners, the business will invest in the further development of its existing sites and the opening of new locations, two of which are already under development in Snowdonia and the Brecon Beacons. In total, it plans to open a further five locations over the next five years.

Phoenix and LDC declined to comment on the deal valuation, while LDC also declined to comment on the returns generated by the transaction.

Debt
Details of the debt package associated with the transaction are yet to be revealed, though unquote" has learned that senior debt is being provided by a lending bank and a debt fund. Unitranche lenders were submitting bids for up to 6x EBITDA, according to a recent report by unquote" sister publication Debtwire, while banks were offering senior leverage "well into the 5x area".

Previous funding
LDC backed the management buyout of Forest Holidays from The Camping and Caravanning Club in September 2012. The GP then provided follow-on funding for the company in 2013.

Company
Founded in 2006, and headquartered in Moira, Derbyshire, Forest Holidays is a holiday accommodation business that operates eco-cabins and treehouses in Britain's National Forests. The company has a partnership with the Forestry Commission, which allows it to exclusively operate on its estate. In total it operates 571 cabins across its existing nine locations.

Forest Holidays generated a turnover of £36.2m in the year ending in March 2017, according to the aforementioned documents.

People
Phoenix Equity Partners – David Burns (managing partner).
LDC – Martin Draper (CEO).
Forest Holidays – Bruce McKendrick (CEO).

Advisers
Equity – Deloitte (corporate finance); Eversheds (legal).
Company – PwC (corporate finance); Gowlings (legal).

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• Topics
• Buyouts
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• UK / Ireland
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• LDC
• Phoenix Equity Partners
• Secondary buyout
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• Eversheds