Case Study: Verdant
Consolidating the UK holiday park market – Verdant Leisure operates across the North East of England and Scotland, providing self-catering lodges, caravan holidays, and holiday home ownership. They allow families to be together in stunning places on the coast or the hills of northern Britain.
Supporting a buy and build strategy with a seasoned team – The company was established in 2010 by a management team led by Chief Executive Graham Hodgson. Verdant Leisure is committed to offering customers excellent service and creating holiday experiences they will cherish. They have a passionate, dedicated team that really cares about their customers.
There was a strong consolidation opportunity in the UK holiday park market, with many parks still owned by individuals/ families. UK holiday hire was also on the rise, with consumers seeking several small UK breaks or staycations.
In April 2016, we invested £14.5m in Verdant in return for a 72% equity stake in the business. Verdant had four parks with more than 2,100 pitches. The deal, valued at £40.5m, saw Palatine Partner Ed Fazakerley and Investment Manager James Painter join the board as non-executive directors.
Our growth strategy was to scale the group by supporting management’s buy and build strategy, expanding and upgrading its existing parks, and growing holiday hire revenues. The management team had previously completed a private equity deal and proven they could successfully acquire and integrate holiday parks into the group.
Going for growth with added value
Strategic M&A – Upon completion, we worked with management to perform a market mapping exercise of the holiday park market to identify further acquisition opportunities. Verdant acquired five additional parks across Southern Scotland and Northern England, and we provided additional equity to part-fund these acquisitions. As a result, pitch numbers have risen from 2,100 to 3,200, making Verdant the fifth biggest operator in the UK. Sales have grown from £15.5m in FY16 to £32.6m in FY20.
Operational improvements – A new head office opened in Lancaster to bring the senior management team under one roof and boost the talent pool for new recruits. The head office has become the home of Verdant’s newly established call centre operation, set up to increase holiday let revenue. Following the investment in the call centre, holiday revenues have more than doubled in the last three years.
People development and employee engagement – We broadened the board composition by appointing an Operations Director and Marketing Director to support sales growth and operational improvement. The Team Verdant HR strategy was introduced, which involved several projects to increase employee engagement and enhance employee wellbeing. Testament to these efforts, Verdant Leisure has been awarded three accolades by The Sunday Times 100 Best Companies to work for 2020 (ranked 3rd in North East, 9th in Scotland and 13th in the UK). Verdant received the highest accreditation by Best Companies for their employee engagement, having achieved an extraordinary satisfaction rating of 93%.
ESG – Verdant’s management was at the forefront of developing new initiatives to mobilise greener practices. The business installed water loggers at all its holiday parks to monitor water use and identify and rectify leaks. The project is expected to save millions of litres of leaked water, not only minimising water consumption but saving costs too. In addition, Verdant has been recognised for its commitment to becoming more sustainable by achieving the Green Tourism Award.
The results – We exited the business in 2021 in a sale to Pears Partnership Capital with a returns multiple of 3.7x. During our investment EBITDA grew from circa £4m to £8.5m, with turnover rising to £32.6m as of 2020.