Private equity firm takes controlling stake in Leicestershire holiday cabin business
A Leicestershire company which owns and runs eco-cabins and treehouses across National Forest sites has been sold to Phoenix Equity Partners, which is acquiring a controlling stake alongside existing shareholders the Forestry Commission and LDC.
Forest Holidays has a long-term partnership with the Forestry Commission under which the company operates exclusively on its estate. It has grown strongly since the initial investment by LDC in 2012, with EBITDA increasing from under £1m to in excess of £10m. The company now has 571 cabins across nine sites, with a further two in development in Snowdonia and the Brecon Beacons. On completion of those two sites, over half of its locations will be within National Parks.
Forest Holidays supports domestic rural tourism with an average sustainable contribution of £2m per annum and 60 jobs per site, benefitting the local economy.
Following completion of the transaction, the Forestry Commission, LDC, and the management team will each retain significant minority stakes.
Bruce McKendrick, chief executive of Forest Holidays, said: “Forest Holidays’ strategy and vision has enabled the company to grow to 571 cabins in nine stunning locations across the UK.
“I am delighted to welcome Phoenix to the team at Forest Holidays, and I am looking forward to working with them.
“The Forestry Commission have been and will continue to be a key long term partner. I would like to thank them for their support in helping us achieve our success to date. I am also grateful to LDC for their faith in investing in the company in 2012, and for being a very supportive partner over the last five years. We are delighted they are staying on board.
“I am convinced that the alignment of existing shareholders, coupled with the catalyst of Phoenix’s investment, will create a fabulous opportunity to deliver the next exciting phase of the company’s growth.”
David Burns, managing partner of Phoenix, said: “As experienced investors in the leisure sector, we have been watching the progress of Forest Holidays with great interest. This fabulous business offers a truly differentiated proposition to the UK holidaymaker, and feedback from its customers is consistently outstanding. We are delighted to be joining Bruce, his team and the existing shareholders to help support the continued development and growth of Forest Holidays, through enhancing its existing estate and opening new sites in Britain’s beautiful woodlands.”
Simon Hodgson, chief executive of Forest Enterprise, the Forestry Commission’s land management Agency in England, said: “This new investment reflects the strength of Forest Holidays and their vision for sustained, responsible growth. Over the years the high-quality, sensitively built holiday cabins have offered great opportunities for people to experience the forests we manage in a new, tranquil way. We have also been able to invest the income they generate in maintaining and improving the forests for everyone. It is important to the Forestry Commission to remain a shareholder in Forest Holidays, as well as their landlord, to maximise the benefits to the nation’s forests.”
Martin Draper, chief executive of LDC, said: “During our five year partnership with Forest Holidays, we’ve continually been impressed by the ambition of Bruce and the management team. They’ve maintained a clear vision on how to generate growth, and as a result of strong demand have more than doubled cabin numbers. We look forward to continuing our partnership as we support the business on the next phase of its expansion. Alongside Phoenix, we’ll be helping the team in continuing to deliver leading luxury accommodation in a growing staycation market, as part of our commitment to backing ambitious businesses in the Midlands.”
Phoenix were advised by Deloitte and Eversheds, and Forest Holidays were advised by PwC and Gowlings.
David Jones – financial advisory partner at Deloitte Midlands who advised Phoenix on the deal – says: “This is yet another great deal for the Midlands region. Following hot on the heels of the Sygnature Discovery, this is the second transaction in the last few months involving Phoenix and Deloitte. The transaction demonstrates the Midlands professional services community is as strong as ever and able to deliver significant transactions with leading businesses.
“We are delighted to have advised on the investment in Forest Holidays by Phoenix Equity Partners. Headquartered at Moira in Leicestershire and with a park situated deep in the heart of Sherwood Pines Forest, Forest Holidays is an outstanding local leisure business, with an impressive management team and a truly differentiated offering. We worked closely with Phoenix, Eversheds and the other advisers to deliver a successful outcome. We wish Bruce McKendrick, CEO and the management team at Forest every success for the future.”
