LDC backs MBO at Lakeland holiday cottages company

Mid-market private equity investor LDC’s Manchester team has backed the management buyout of Lakelovers, a specialist in luxury holiday cottages in Cumbria.

Founded in 1977, Lakelovers is a property management and lettings agency specialising in premium holiday cottages across the Lake District.

Headquartered in Windermere, the business manages more than 500 holiday properties, providing an end-to-end property management service that includes marketing, maintenance and bookings support, alongside bespoke legal, financial and regulatory advice, through its network of high-street branches.

The management buyout was led by chief executive Paul Liddell who has overseen the growth of Lakelovers since acquiring the business in 2000.

Since then, Lakelovers says it has successfully built a reputation for managing and letting premium holiday cottages in sought-after locations across the Lake District, and now accommodates thousands of new and repeat customers every year.

LDC’s investment – the value of which is undisclosed – will help to drive the business forward, providing the capital to launch an acquisition trail that will drive scale across the Lakelovers portfolio and helping the business to capitalise on the growing trend for ‘staycations’.

In 2016 Visit England reported 6.9 million Britons were planning an overnight stay in the UK, up from 5.1 million in 2015, whilst the latest ONS statistics also show record levels of overseas tourism with 37.6 million overseas visitors spending a total of £22.5bn during 2016.

Liddell said: “Our business is founded on trust and a genuine understanding of the region’s tourism sector and it is the strength of our relationships with homeowners, combined with a focus on quality and service that has underpinned our growth journey to date.”

The deal was led by LDC investment directors Simon Braham, John Clarke and senior director Ged Gould.

Braham and Gould will join the board as non-executive directors alongside Gary Fletcher.

Fletcher, former chief executive of Forest Holidays, has more than 20 years’ experience supporting the growth of UK-focused travel businesses and is currently the non-executive chairman of LDC-backed holiday park operator Away Resorts and non-executive director of Forest Holidays.

Gould said: “With a focused proposition, a commitment to quality and service and a CEO that has more than 30 years’ experience in the local property market, Lakelovers has established itself as the pre-eminent provider of premium holiday cottages in the Lake District.

“Under Paul’s leadership, the business has developed a scalable business model that not only enables property owners to realise the full potential of their holiday home, but firmly lays foundations for future growth.”

The deal marks the fifth investment for LDC’s North West team in 2017, with more than £75m of equity invested during the period.

It follows the management buyout of construction, contracting and housebuilding software specialist Eque2, the management buyout of Hill Biscuits, the management buyout of Fishawack, the specialist provider of scientific communications service, and its multi-million-pound investment in ChargePoint Technology, the manufacturer of specialist high containment and sterile transfer valves for the pharmaceutical and biotech industry.

LDC was advised by Grant Thornton (Peter Terry, Matt Bryden-Smith, Joe Pollard and Brad Seekings) and DLA Piper (Chris Wilson and James Kerrigan), CIL (Liam McGuinness and James Cavanagh) provided commercial due diligence, with KPMG (Steve Heath and John Moth) providing financial due diligence and Javelin (Michael Fine and Humphrey Rose) providing digital due diligence.

Lakelovers was advised by KPMG (Jonathan Boyers, Richard Stark, Sarah Bannister and Harry Eastwood).

Boyers, head of M&A at KPMG and lead advisor to the shareholders, said: “This deal – our third in the holiday cottage agency market – highlights the continued interest from both PE and strategic trade consolidators in the sector, stemming from the fragmented nature of the market and the ever-growing trend in the UK towards staycations.

“The strong interest we received during the sale process is a testament to the brand’s reputation, the quality of its portfolio and the sound business operation that Paul and Andrew have built. Lakelovers represents a fantastic platform which I’m sure, with LDC’s support, will continue to go from strength to strength.”

Pinsent Masons (Helen Ridge, Vicky Jew and Francesca Heggie) advised the vendors.