Palatine exits Verdant Leisure for 3.7x money

The GP netted a 3.7x money multiple on the exit, which ends a holding period of five years.

Pears Partnership Capital makes direct equity investments in operating businesses, investing on behalf of the Pears family. The firm provides capital injections of EUR 20m-150m, backing established EU- and UK-headquartered companies with EBITDA of more than EUR 5m and an EBITDA margin of more than 15%.

Palatine acquired Verdant Leisure in April 2016 in a GBP 40m SBO from RJD Partners. Palatine deployed equity via Palatine Private Equity Fund III, which held a final close on its GBP 220m hard-cap in June 2015. Yorkshire Bank provided senior debt, while Tosca Debt Capital delivered a second-lien debt tranche, according to Unquote Data.

During the investment period, Verdant's turnover has increased by 150%, according to a statement. The company increased its holiday home sales and the profitability of its holiday let operations.

Palatine also focused on ESG as part of its value creation strategy, according to a statement, which included increasing employee satisfaction.

In addition, Verdant acquired several holiday and leisure park sites under Palatine's ownership to expand its UK coverage, the most recent of which was Erigmore Estate in January 2020.

The deal is Palatine's fourth exit of 2021 and follows the sale of financial adviser Wren Stirling via an SBO to Lightyear Capital and the company's management team.

In June 2021, Palatine managing partner Gary Tipper told Unquote that, while Verdant Leisure was required to close its sites for several months due to the UK's coronavirus lockdowns, the company was now performing ahead of its budget due to an increased demand for domestic holidays.

Further PE-backed companies that could benefit from the UK's "staycation" boom include Park Holidays UK, which was acquired by Intermediate Capital Group (ICG) in December 2018. Phoenix Equity Partners has owned Forest Holidays since December 2017, when the GP acquired a majority stake in the rural accommodation company from LDC.

Click here to read a GP Profile of Palatine Private Equity on unquote.com.

Previous funding
RJD Partners acquired a 75% stake in Verdant Leisure in September 2010, according to Unquote Data. The GP merged the company with Dunham Leisure, with Dunham's management team heading the combined entity.

Company
Founded in 1999 and headquartered in Lancaster, Verdant Leisure operates holiday parks in Scotland and the north of England, providing caravans, lodges and holiday homes across 10 locations with 3,500 pitches. The company posted revenues of GBP 32.9m and EBITDA of GBP 8.1m in the year to February 2020, versus GBP 29.4m in turnover and EBITDA of GBP 7m in the previous year.

People
Palatine Private Equity – Ed Fazakerley (partner); James Painter (investment director).
Verdant Leisure – Graham Hodgson (CEO).
Pears Partnership Capital – Mark Crowther (managing director).

Advisers
Vendor – Clearwater International, Gareth Iley, Mike Reeves, Zack Goddard, Dom Moir (corporate finance); Gateley, Rebecca Grisewood, Leigh Whittaker (legal).
Equity – Macfarlanes, Jessica Adam, Mark Stephens (legal).

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• Topics
• Exits
• UK / Ireland
• Consumer
• United Kingdom
• Palatine Private Equity
• Management buyback