Sykes Acquires Forest Holidays to Create Diversified UK Holiday Specialist Group

Forest news

07/04/22

‘Transformative’ combination creates diversified holiday group with ‘unrivalled expertise and customer proposition’ in UK holiday market with ‘shared purpose’.

Sykes Holiday Cottages, an independent holiday cottage rental agency, is acquiring a controlling stake in Forest Holidays, the UK’s leading owner and operator of environmentally sensitive cabins, in order to accelerate its ambition to become a leading UK-focused holiday group with a diverse range of unique rental accommodation.

Sykes shares Forest Holidays’ approach to sustainable tourism which strives to have a positive impact on the planet and local communities whilst providing memorable shared experiences for its customers. The combined business will be united by a common purpose to bring further benefits to nature, people and local communities.

Forest Holidays is the owner and operator of environmentally sensitive cabins set across Britain’s forests. Since the mid-1970s, the Company has sensitively created cabins under the guiding principles of sustainable woodland use and the preservation of the countryside and biodiversity. To date, Forest Holidays has invested over £100 million into Britain’s forests, increasing recreational use, improving facilities, and creating and maintaining trails. Forest Holidays has 12 forest locations with many in National Parks and Areas of Outstanding Natural Beauty, including the Loch Lomond and Trossachs National Park in Scotland and opening later this year in the stunning Brecon Beacons National Park in Wales.

As part of the combination, Forest Holidays’ existing institutional investor group, which is led by Phoenix Equity Partners and includes LDC, will realise their successful investment. Forestry England, Forestry and Land Scotland and Natural Resources Wales will divest their legacy minority stake. They will still be a responsible and supportive landlord to Forest Holidays as they are to hundreds of other partners who create experiences for the public to enjoy in forests across England, Scotland and Wales.

Sykes, whose platform provides access to over 22,500 holiday homes, is the UK’s fastest-growing holiday cottage rental agency. The business is backed by Vitruvian Partners.

The two businesses will be run independently by their existing leadership teams under a newly formed parent company.

Graham Donoghue, CEO of Sykes, said: “As the UK’s leading provider of woodland accommodation, Forest Holidays is the perfect complement to our existing holiday cottage rental business, offering our respective customers an unrivalled choice and quality of accommodation across a variety of settings. We’ve been impressed by what Bruce McKendrick and his team have achieved and are excited by our common purpose with a focus on environment, local and rural communities at the core of our businesses.”

He added: “It’s also a transformative acquisition for Sykes which creates a UK-focused multi-brand holiday group with market-leading technology, service and product. Looking ahead, we’re ideally placed to fly the flag for UK tourism and showcase the very best our islands have to offer from coast to country.”

Bruce McKendrick, CEO of Forest Holidays, said: "Forest Holidays has always sought to balance social, environmental and economic benefit. The benefits we bring to physical and mental well-being are more important than ever and in Sykes we have found a partner who shares this ethos. They also recognise the importance of our long-term partnership with the Forestry Commission and our shared objective to offer holidays that are good for people, good for nature and good for the environment. We are grateful to Phoenix and our other shareholders for helping us to build the business we have today."

He added: "Graham Donoghue and his team's commitment to a strong purpose is impressive and we are hugely excited by the opportunity to take this ambition forward together"

The combined group will employ more than 1,700 people and is estimated to take over 2.65 million customers on holiday in 2022.

Advisors

Sykes Holiday Cottages team was led by its Corporate Development Team (Michaela Davies, Sophie Bullough and Joe Cross) and advised by Clearwater International (debt advice), Mayer Brown International LLP (legal), FTI Consulting (tax and accounting) and Springboard Corporate Finance.

Forest Holidays were advised by Harris Williams (Investment Banking), Travers Smith (Legal), Burness Paul (Property) PwC (Financial DD) L.E.K (Commercial DD) and Intechnica (Technical DD). Management were advised by Liberty CF (Financial) and Eversheds Sutherland (Legal & Tax).