Sunday 18 December 2016 12:07 pm

Another miss for London’s IPO market? Parkdean Resorts sold to Canadian private equity house

A Canadian private equity house this weekend announced the acquisition of a UK caravan holiday parks operator, in a deal that could be seen as another loss for London’s flotation market.

Toronto-based Onex Corporation has agreed a £1.35bn deal for Parkdean Resorts, which is currently owned by Epiris, formerly known as Electra, and Alchemy. The deal is expected to close in the first quarter of next year.

The announcement comes at the end of year in which the owners of Parkdean, which operates 73 holiday parks across the UK, were considering floating the company on the London Stock Exchange.

Read more: Park Resorts and Parkdean to merge to create holiday giant

In September 2015, Epiris’ Park Resorts merged with Alchemy’s Parkdean Holidays to create Parkdean Resorts, which then had an estimated enterprise value of £960m.

Epiris, which is believed to have a 45 per cent stake in Parkdean, said it would receive proceeds of £405m from the sale, an uplift of £25m based on the valuation of its investment in September 2016.

“We are proud of our investment in Parkdean Resorts and in many ways it represents what differentiates Epiris from the crowd,” said Alex Fortescue, managing partner at Epiris.

“Through a series of bank-related acquisitions and 11 individual transactions we have transformed our original Park Resorts debt position into joint control of a very high-quality, market-leading business with profits of more than £100m.”

Tom Boszko, a partner at Alchemy, which owns around a third of Parkdean, said: “Parkdean Resorts is a unique asset with an exceptional management team, who we have supported in transforming the business into the UK’s leading holiday park operator.

“It has been an absolute pleasure working alongside the team and our investment partners and we look forward to watching the continued success of the business.”

Read more: UK private equity activity dropped to financial crisis levels this year

Another miss for London’s IPO market?

It has been a tough year for London’s flotation market, with a number of other IPOs being pulled throughout the year.

Technology giant Misys, Pure Gym and TI Fluid Systems all withdrew their plans late on in October, with investor demand harmed by uncertainty around Brexit.

Meanwhile, Parkdean has become the latest company to be sold after flotation plans were parked, following in the footsteps of Krispy Kreme, store card maker NewDay and flights website Skyscanner.

According to a report by law firm Baker & McKenzie, UK IPO activity dropped by 60 per cent in 2016, raising $6.9bn, down from $17.5bn.