Electra backs Park Resorts with £45.5m debt purchase

Kimberly Romaine
17 January 2012

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Electra Partners has acquired Lloyds' stake in Park Resorts, which is due to refinance in 2014.

Electra invested £45.5m to enter the caravan park sector by acquiring the term debt of Park Resorts from Lloyds at a discount to face value. The deal sees incumbent backer GI Partners stay in the business, which has debt maturing in 2014. It is likely that there will be a new capital structure put in place before then – probably by autumn 2013 at the latest – which may see Electra take on a larger equity stake and begin a consolidation of the sector with Park Resorts as a platform.

Lloyds acquired the debt through its acquisition of HBOS, which had backed the 2007 GI-led buyout from ABN Amro.

Previous funding
Park Resorts is au fait with private equity ownership, given its seven-year history with the industry. ABN Amro Capital (now AAC) backed the £105m MBO of GB Holiday Parks in November 2004 and a month later bolted on Park Resorts for £165m, according to unquote" data. ABN sold the business less than three years later, generating a 47% IRR and multiple of 2.4x after having added 400 new pitches during the hold period, corresponding to an EBITDA increase of 43%.

In May 2007, GI bought the business for £440m with HBOS providing funding. The deal saw the original founders leaving the business after six months to be replaced by a team led by Martin Grant (who had formerly led the Road Chef buyout). That deal was less charmed than the initial buyout, with GI pumping an additional £15m into the business in April 2008. In 2009 the founders David Vaughan, Robert Sewell and Alan Castledine returned and a £325m debt restructuring saw the banks take a 5% stake in the business, though no debt was written off. The restructuring included a new £35m revolver to finance a five-year investment programme.

Company
Park Resorts was founded in 2001 with the buyout of 12 parks from Bourne Leisure. That team was led by David Vaughan. The company is a holiday park operator in the UK with caravan sites in 39 locations. There are parks in Essex, Yorkshire, Kent, Sussex and Scotland.

People
Alex Fortescue and Sarah Williams led the deal for Electra.

Advisers
Equity – Clifford Chance, John Davison, Adrian Cohen, Anna Perry (Legal); PricewaterhouseCoopers, Tim McCann (Tax); Joanne Hatley (Corporate finance).