Private equity firm Phoenix has paid over £50 million for a controlling stake in Forest Holidays as it looks to cash in on the rising trend in staycations.
The deal will see Phoenix sit alongside existing shareholders the Forestry Commission and LDC on the investor register, and the tie-up will result in an expansion drive.
Forest Holidays operates 571 “eco-cabins” and treehouses on nine sites across Britain’s National Forests, with a further two in development in Snowdonia and the Brecon Beacons.
Following the investment from Phoenix, the group plans to open at least five new sites by 2022.
Forest Holidays has grown strongly since initial investment from LDC in 2012, with earnings rising from under £1 million to over £10 million. The group is valued at around £110 million.
The rise in staycations following the collapse in the value of the pound has meant that domestic holiday operators have become highly sought-after assets.
Private equity firm Caledonia Investments sold caravan park operator Park Holidays to Intermediate Capital Group (ICG) for £362 million last year, while the country’s biggest operator, Parkdean Resorts, was sold by Epiris to Toronto-based Onex Corporation for £1.35 billion.
With Brits getting considerably less value for their pound abroad, more people are having to holiday at home, a trend expected to continue as the economy weakens and Brexit takes its toll.
David Burns, managing partner at 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.”
Forest Holidays has a long-term strategic partnership with the Forestry Commission under which the company operates exclusively on its estate.
The firm’s cabins are planned around existing forest and utilise sustainable materials, such as air-source heat pumps, hydroelectric plants and a dark skies policy across its estate.