Canada’s Onex bags UK holiday park business for £1.35bn

The deal means more than £1.7bn has been splashed on UK holiday parks businesses by private equity firms in as many months. 

Onex Real Estate Partners, the property arm of Toronto-based private equity fund manager Onex Corporation, has acquired one of the UK’s biggest holiday parks businesses, Parkdean Resorts, for £1.35 billion ($1.65 billion; €1.56 billion).

The deal will see Onex take on Parkdean Resort’s entire portfolio of 73 camping and caravan holiday parks and it is understood that the firm is planning to invest around $750 million to expand the business. Onex used capital from its Onex Partners IV vehicle to buy the portfolio and contributed around $170 million to the total as a limited partner in the fund, according to an announcement on its website.

The seller was London-based private equity firm Epiris, which was formerly known as Electra and Alchemy.

Parkdean Resorts sells more than 500,000 holidays a year in its campsites, chalets and apartments.

The deal also represents the second major transaction in the sector in recent months, following the £362 million purchase of rival holiday parks business, Park Holidays, by UK asset manager ICG from Caledonia Investments.

Demand for UK-based vacations, or ‘staycations’, has increased in the last 12 months after last year’s Brexit-fueled slump in sterling made foreign trips more expensive.

“These deals demonstrate major confidence in the holiday park market and reflect the continuing strong outlook for UK domestic holidays,” said Mark Churchouse, senior director, CBRE, which advised Parkdean Resorts on the deal.

“Both deals were highly competitive with a range of private equity bidders, demonstrating the high level of investor interest in the UK operational real estate market and confidence in the future prospects of the leisure sector in a post-Brexit era,” he added.

Onex has yet to comment on the transaction