Private equity is getting in on the "hygge" trend, as London-based Phoenix Equity Partners has finally completed a deal to buy part of cabin break business Forest Holidays just in time for the Christmas holidays.
The deal, which sources told City A.M. could value Forest Holidays at around £100m, sees Phoenix taking a controlling stake. Previous owner LDC, the private equity arm of Lloyds Bank, will retain a "significant" minority stake alongside the Forestry Commission.
Phoenix, which also owns caravan park operator Bridge Leisure, is investing to develop existing locations and help the business open new eco-friendly holiday escapes.
“As experienced investors in the leisure sector, we have been watching the progress of Forest Holidays with great interest," said Phoenix's David Burns.
"This fabulous business offers a truly differentiated proposition to the UK holidaymaker, and feedback from its customers is consistently outstanding."
Private debt provider Ares and the Royal Bank of Scotland (RBS), advised by City law firm Dechert, provided senior debt to fund Phoenix's acquisition.
Since LDC first invested in Forest Holidays in 2012, the business's earnings before deductions have grown from less than £1m to more than £10m.
It now has 571 cabins across nine sites, with a further two in development in Snowdonia and the Brecon Beacons.
Phoenix was understood to be competing in the final stages of the Forest Holidays process with with Caledonia Investments, the firm backed by the wealthy Cayzer family. However, sources told City A.M. that the sellers' attention turned to Phoenix after Caledonia lowered its offer price.
Other private equity houses, including Drake & Morgan owner Bowmark and Evans Cycles owner ECI, as well as Brookfield-backed Center Parcs, were knocked out in earlier stages.
LDC's move to retain a stake in the business comes as more and more private equity houses are taking a longer-term approach to investing, selling part of their stakes in companies to return some money to investors while holding onto a slice in the expectation that the value will continue to rise.