Electra Private Equity PLC ("Electra") is pleased to announce the proposed merger of its portfolio companies Park Resorts, South Lakeland Parks and Southview and Manor Park (collectively referred to as the "Park Resorts Group") with Parkdean Holidays in a transaction that gives the enlarged company an enterprise value of £960 million. The transaction is subject to approval from the Competition and Markets Authority and the Financial Conduct Authority.
The merger valuation of Electra's debt and equity interests in the Park Resorts Group implies an uplift of £21 million, equivalent to an increase in diluted NAV per share of 52p, compared to the 31 March 2015 valuation of £239 million and net investment since that date of £24 million.
On completion of the transaction a new £550 million debt facility arranged by Barclays, RBS and JP Morgan will be used to refinance existing debt facilities including those in which Electra has invested, resulting in expected cash proceeds to Electra of £96 million; this would take total cash proceeds received by Electra to £106 million or 81% of original investment cost. Following completion Electra will own an equity interest of 45% in the combined group alongside the management team and other shareholders.
Electra originally invested in Park Resorts in 2012, buying the company's senior debt. Electra Partners' strategy was to take an equity position in Park Resorts through a restructuring of the company's debt and thereafter to grow the business organically and through acquisition. This strategy has been delivered through: a refinancing led by Electra Partners in August 2013; the acquisitions of South Lakeland Parks, Southview and Manor Park holiday parks and most recently the Summerfields Holiday Park; and a number of investment and operational improvement programmes which resulted in profits across Electra's caravan park businesses growing by 28%, on revenues which rose by 8%, in 2014.
The merger combines two complementary portfolios of holiday parks to create a nationwide operator with 73 sites and EBITDA of over £100 million
Alex Fortescue, Chief Investment Partner at Electra Partners, said:
"This latest step in the Park Resorts story further illustrates how Electra Partners' flexible investment strategy can be used to maximum effect. What started as an investment in Park Resorts' senior debt has now become an equity position in a business of real scale and with strong growth prospects in the UK domestic holiday sector."
Alan Parker, Chairman of Park Resorts, said:
"The Park Resorts Group and Parkdean Holidays are an outstanding strategic fit with highly complementary estates and revenue mixes. I am greatly looking forward to working with the teams to deliver further growth. "
Alex Fortescue, Sarah Williams and Tom Stenhouse are responsible for the investment in Park Resorts Group.
This continues Electra's extensive portfolio activity this financial year, which has included the announcement or completion of disposals of Nuaire as well as JOC Group and Breakbulk from AXIO Data Group; and of bolt-on acquisitions to Allflex Corporation, Davies Group, The Original Bowling Company and PINE Unit Trust.
Electra Partners refers to Electra Partners LLP acting on behalf of its client Electra Private Equity PLC.
The New Company, Park Resorts and Electra have been advised by Clifford Chance.
For further information please contact:
Andrew Honnor and Matthieu Roussellier, Greenbrook Communications
+44 (0)20 7952 2000
Andrew Kenny and Nicholas Board, Electra Partners
+44 (0)20 7306 3902
Note to Editors:
About Electra Partners LLP
Electra Partners is an independent private equity fund manager with over 25 years' experience in the mid-market. During the last 25 years it has invested in excess of £4.5 billion in over 200 deals. As at 31 March 2015, the firm had funds under management of over £1.6 billion including capital available for new investment of nearly £400 million.
Electra Partners' flexible investment strategy allows it to invest broadly across the private equity market with a particular focus on Buyouts and Co-investments, Secondaries and Debt. In addition to this, its long-term capital base means it is not constrained by expiring investment periods or exit pressure driven by fund raising cycles and is therefore able to realise investments only when returns are maximised for its investors.
The firm's major client is Electra Private Equity PLC ("Electra"), a private equity investment trust which has been listed on the London Stock Exchange since 1976. Electra's long-term investment performance has been consistently superior to private equity and other benchmarks. Over the ten years to 31 March 2015, Electra has seen diluted NAV per share growth of 251%. This is over five times the NAV per share return of the Morningstar Private Equity Index (ex. Electra). It is also equivalent to a ten-year annualised return of 13%, at the upper end of Electra's target range of 10-15% over the long-term.
For further information please visit www.electrapartners.com.
Electra Partners LLP is authorised and regulated by the Financial Conduct Authority.
About Park Resorts
Park Resorts is a leading holiday park operator with 49 coastal holiday parks across England, Scotland and Wales. The company employs over 3,500 staff during the peak holiday season and is headquartered in Hemel Hempstead. Park Resorts incorporates a holiday sales business as well as a highly successful and profitable caravan sales business.
Parkdean Holidays is a UK focused self-catering holiday park operator with 24 sites primarily located South West of England and in Scotland. It offers a range of accommodation, including caravan holiday homes, lodges, flats and chalets, which are available for short breaks and longer holidays throughout the year.
For further information please visit www.parkdeanholidays.co.uk