ECI sells Travel Chapter for 2.6x

Travel Chapter announced plans for an IPO on the AIM in London in October 2021, as reported. However, the company shelved the idea in November citing market volatility, as reported – although it said in a statement that it had seen significant interest from institutional investors.

ECI acquired a majority stake in Travel Chapter from Phoenix Equity Partners in 2019, ending a three-year holding period; the deal saw Phoenix generate returns of 3.6x money and a 62% IRR. Permira provided debt to back the SBO.

ECI invested in Travel Chapter via ECI 11, which held a final close in July 2018 on its hard-cap of GBP 700m. The fund's most recent investments include insurance broker Avantia Group, which the GP acquired in September 2021. ECI targets UK-based mid-market companies, focusing on sectors including technology, media and business services.

During the investment period, Travel Chapter completed seven add-ons, most recently acquiring Sally's Cottages.

ICG is deploying capital via ICG Europe Fund VIII. The direct lending fund backs European mid-market companies, generally making investments of EUR 100m-700m per deal and targeting companies with enterprise values of EUR 300m-3bn, according to Unquote Data.

ICG's previous investments in the travel and leisure sector include Park Holidays. According to Sky News, the GP is expected to sell the company in a GBP 900m trade sale to Sun Commodities, as reported.

Unquote spoke to Gaëlle d'Engremont, partner and head of food and consumer at PAI Partners, about the prospects for the travel and leisure sector for the latest edition of the Unquote Private Equity Podcast. Click here to listen to the episode.

Company
Founded in 1989 and headquartered in Bideford in Devon, Travel Chapter is a booking platform for self-catering holiday rentals that connects property owners with customers. Its brands include Holidaycottages.co.uk, as well as Canine Cottages and Cottages & Castles.

According to its latest publicly available accounts, the company posted turnover of GBP 34.6m and adjusted EBITDA of GBP 15.6m for the year to 31 October 2020, before Covid-related cancellations and refunds were taken into account, versus revenues of GBP 23.4m and adjusted EBITDA of GBP 3.5m after Covid-related disruptions. It posted revenues of GBP 26.1m and adjusted EBITDA of GBP 9.8m in the previous year.

At the time of its acquisition by ECI, the company posted revenues of GBP 13.4m and EBITDA of GBP 4.2m.

People
ECI Partners – George Moss (partner).
Travel Chapter – Jayne McClure (CEO).
ICG – James Roddis (managing director).

Advisers
Vendor – GCA Altium (corporate finance); Travers Smith (legal).
Debt – Harris Williams (corporate finance); Ropes & Gray (legal); Alvarez & Marsal (financial due diligence); LEK (commercial due diligence).

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