Barclays, Royal Bank of Scotland and JP Morgan are planning to provide a £550m refinancing and acquisition facility to the newly proposed £960m Park Resorts Group, which will become the largest holiday park operator in the UK.
Park Resorts is to be formed by a merger of Electra Private Equity’s existing portfolio of UK leisure assets, which include the Hertfordshire-based Park Resorts and South Lakeland Parks, with Alchemy Partners’ Newcastle-based holiday operator, Parkdean.
The deal, which will bring together 73 holiday parks serving 1.8m customers and with a predicted turnover of £370m, is subject to approval from the Competition and Markets Authority and the Financial Conduct Authority.
The proposed bank loan will refinance the existing debt facilities and help fund new acquisitions. The loan is expected to be syndicated.
The refinancing will also result in cash proceeds to Electra and Alchemy. Both firms will retain an interest in the new group.
“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,” said Alex Fortescue, chief investment partner at Electra.
London-based Electra bought Park Resorts’ senior debt, with a face value of £130m, in 2012 for £70m. It said its strategy was to take an equity position through restructuring the company’s debt and to grow the business organically and through acquisition.
It took an 54% equity position after leading a refinancing in 2013 and then invested another £62m to acquire South Lakeland Parks, Southview and Manor Park holiday parks and Summerfields Holiday Park.
Private equity and distressed debt investor Alchemy, also based in London, bought Parkdean in 2006 for £140m.