RJD had tracked the UK holiday parks sector for a number of years as an attractive sub sector of the leisure market, but asset values had become inflated prior to the credit crunch. Despite the challenging economic climate in 2009/10, the UK tourism industry was performing well and had robust long-term growth drivers.
We believed that the sector would not only continue to benefit from these trends but, in addition, the very fragmented nature of the UK holiday park sector would provide strong potential for value creation. As a result, we researched off market investment opportunities and, through this, were introduced to the highly experienced sector management team of Graham Hodgson and Bev Dixon.
Graham and Bev had an impressive track record – they previously led the private equity backed MBO of South Lakeland Parks – and they were looking for a suitable buy-in opportunity.
In September 2010, we backed them with Graham as CEO and Bev as Operations Director in a management buy-in of Dunham Leisure – a holiday park business based in South East Scotland – thereby creating Verdant Leisure.
Dunham Leisure comprised two well-established parks: Thurston Manor, a 175 acre park situated 30 miles from Edinburgh near the historic coastal town of Dunbar in East Lothian; and Pease Bay, which is located directly beside a sandy beach, five miles south east of Thurston Manor.
We recognised that the parks had excellent foundations and a strong customer reputation, but nevertheless offered significant development potential and represented an attractive platform from which to implement a buy and build strategy to create a larger regional group with significant scale.
Graham Hodgson, Verdant Leisure
We’ve been highly selective in reviewing the many acquisition opportunities that have come our way since the buy-in last year and we singled out Viewfield Manor as a well located park offering clear operational improvement and growth opportunities. Whilst it is complementary to the existing Verdant parks in that there is a significant cross over in catchment area, Viewfield Manor also expands the breadth of our market offering and we are excited about its addition to our portfolio.
We subsequently backed Verdant Leisure to make two additional off market acquisitions, Riverside Holiday Park and Viewfield Manor, both of which required further capital support from RJD.
The parks performed strongly following their acquisition, reinforcing the team’s well-established reputation for adding significant value to the assets they acquire.
Verdant had established itself as a credible platform for further acquisitions in Scotland and the North of England through the investment period and this facilitated RJD’s exit from the investment in November 2016 through a secondary buy-out following significant value creation.