Pitch Best Deal 2020: KKR – Roompot Group
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Name of the deal: KKR acquires Roompot Group from PAI
Date: Announced 18 June 2020, closed 3 September 2020
Published value: €1.1 billion
Buyer(s): KKR & Co. Inc.
Target: Roompot Group
Seller: PAI Partners
M&A Database: View more details of this deal
Involved firms and advisors sell side:
Deloitte (Tax Advisory), Clifford Chance Amsterdam (Legal Advisory Corporate M&A), KKR & Cp. (PE Management), Goldman Sachs (M&A Advisory), Simpson Thacher, Ropes and Gray, FTI, BCG, Xaeus Blue, SK, AON, CSM, JLL, ERM, Debevoise
Involved firms and advisors target:
PwC (Tax Advisory and Financial Due Diligence), Van Doorne (Legal Advisory Corporate), Jamieson (M&A Advisory)
Involved firms and advisors sell side:
Rothschild & Co (M&A Advisory), Allen & Overy (Legal Advisory Corporate & Tax Advisory), PwC (Tax Advisory), PAI Partners (PE Management), Tauw (Consultancy), Cushman and Wakefield, Euro-Solutions, Tauw, Ommax
Pitch
Brief description deal / Deal outline:
Roompot Group is a provider of holiday parks in Western Europe and the #1 operator in the Netherlands. Founded in 1965 in the region of Zeeland (the Netherlands), Roompot has progressively developed to become a leading holiday parks operator in Europe.
Under PAI’s ownership, Roompot invested significantly in upgrading and expanding its accommodations and opening new parks, developed a strong digital marketing and distribution platform, increased real estate ownership and grew revenue and EBITDA at double digit growth rates.
The business directly owns and operates 33 parks in the Netherlands, Germany and Belgium, and works with more than 100 third-party park operators to support their booking and distribution efforts and provide development, design and refurbishment services. The company now welcomes three million guests and 13 million overnight stays each year, generating revenues of almost EUR 400 million.
At the beginning of the summer 2019 PAI started to investigate potential exit routes and prepare for the disposal of the Company.
During the summer 2019 and throughout January to early March 2020, Roompot's management team held several coffee meetings with potential investors coming from different backgrounds (PEH, infrastructure and real estate). Those sessions were combined with the possibility for the potential buyers to visit certain Roompot parks which allowed potential buyers to get fully up to speed before the official launch of the process and better understand each potential buyer's real interest for the sector and the asset. Phase I was initially scheduled to be launched by end of March 2020 but due to COVID-19 pandemic, it was decided not to launch the process
On Wednesday 13th May 2020, PAI received an unsolicited non-binding pre-emptive offer from KKR Core Investment Fund, 100% equity underwritten. KKR committed to submitting a binding offer within 3 weeks of due diligence The transaction was conducted in an extremely tight timeline leading to (i) reception of a confirmatory NBO in 1 week and (ii) the signing of a binding agreement in less than 3 weeks.
On Friday 29th May 2020, KKR submitted a non-binding equity offer, confirming an attractive Equity Value for the seller and its intention to move forward on a full equity basis and ability to finalize due diligences in maximum 3 weeks. Based on the agreed equity value, KKR was granted 2.5 weeks of due diligence with access to the VDR, VDD reports, financial model, expert sessions, additional site visits and management presentation.
On Thursday 18th June 2020, a binding agreement was finally signed between PAI and KKR at the agreed equity value.
Gaëlle d’Engremont, Partner and Head of Food & Consumer at PAI Partners, said: “PAI has accompanied Roompot through an exciting transformation journey since 2016. Roompot has significantly reinforced its offer and its leadership in the Dutch holiday park sector over the past four years under the leadership of Jurgen. We are delighted that KKR will support the strong ambitions of the team to continue this successful trajectory.”
Why should this deal win the Award for Best Deal 2020?
The deal is a landmark transaction, in particular as it was the first transaction of its size executed during challenging times due to the COVID-19 pandemic. This transaction could be considered as the first European LBO transaction above €1bn EV done in the middle of the COVID-19 crisis. It not only confirms the reopening of the PE market but also the ability of certain PEH to act quickly and continue to take some risks, notably with respect to the acquisition financing
In addition, the leisure sector in which Roompot operates was severely hit by the COVID-19 pandemic, so it was even more remarkable that parties were able to come to agreement on terms satisfactory for all concerned.
Jurgen van Cutsem, CEO of Roompot Group, said: “As we change to new ownership we would like to thank PAI, who have been a hugely supportive partner to our team since 2016, and welcome KKR for the next phase. Our focus, as always, will be providing a great service for our leisure customers and third-party providers. We continue to see growing demand from our guests and from our corporate partners due to the leading platform we have put in place, providing a solid foundation to scale the business, also on an international level.”
Deal rationale:
KKR has been looking for a platform to invest in the fragmented European holiday parks market for some time and fits perfectly with the broader investment theme in the leisure space With KKR as new shareholder, Roompot will focus on further growth in its home market of the Netherlands and further expand geographic footprint in adjacent countries
Roompot is already a leading player in the region with a best-in-class management team and a strong recent track record. Significant further growth potential is identified based on a very strong development pipeline, continued expansion of Roompot's owned assets and new corporate partnerships and can be achieved through KKR’s acquisitive firepower. KKR is investing in Roompot through its Core Investments strategy, which is their pool of capital for longer-term investments.
Roompot made for an attractive investment opportunity because of growing demand from guests and from corporate partners due to the leading platform Roompot has put in place.
Further growth has already been activated through the acquisition of Pagedal in July 2020 and Qurios in September 2020 Supportive structural trends around domestic tourism such as holidaying closer to home and higher prevalence of shorter breaks play to the strength of Roompot. These trends are clearly exacerbated by the COVID-19 pandemic
Daan Knottenbelt, Partner and Head of the Benelux region at KKR, said: “Roompot is already a leading player in the region with a best in-class management team and a strong recent track record. We see significant further growth potential based on a very strong development pipeline, continued expansion of Roompot's owned assets and new corporate partnerships. KKR is investing in Roompot through our Core Investments strategy, which is our pool of capital for longer-term investments, and we look forward to working with Jurgen and his team over the coming years.” Joerg Metzner, Director at KKR, added that “We have been looking for a platform to invest behind in the fragmented European holiday parks market for some time. Our support for Roompot and its management team fits perfectly with our broader investment theme in the leisure space.”
The investment continues KKR’s track record in the Netherlands with major recent investments including Upfield (formerly Unilever’s Spreads business), Exact Software (a leading provider of accounting software to SMBs) and Q-Park (a pan-European parking services provider).
What is the impact of this deal for the company?
KKR will continue to support Roompot’s current management team with its further development into a leading pan-European operator, driven by supportive structural trends around domestic tourism.
The transaction will enable the Roompot group to continue to provide the best possible service to its guests and business partners and to continue to strive for growth. Over the past years, Roompot has developed a solid basis and strategy for the expansion of the business, including on an international level.
What is the impact of this deal for the direct stakeholders?
The deal as such does not influence Roompot as an employer and Roompot's employees – all employees have been able to stay on. In the longer term, the group will most likely be able to employ more people since it will benefit from the combined vision of KKR and Roompot on M&A and development opportunities.
What is the impact of this deal on society?
The development of Roompot's parks is very important considering the changed attitude towards traveling developed over the past year(s) due to COVID-19. Additionally, traveling closer to home has become much more popular for sustainability reasons, which can also be facilitated by development of Roompot's parks (and Roompot is actively pursuing sustainability within its business as well).
What was most complex about this deal?
The combination of a very short window to do the transaction, amidst the COIVID-19 pandemic and with rapidly changing market circumstances. This transaction also showcases the ability to orchestrate a highly efficient tailor-made process, in the middle of the COVID-19 crisis, within a very short timeframe while maintaining maximum pressure on the buy-side, secure a binding preemptive bid in the shortest timeframe by containing depth of due diligence, and maximize confidentiality of the informal process to keep optionality on future sale in case of failure of the approach.
