GI buys into caravan parks

US buyout firm GI Partners has backed a £440 million secondary buyout of Park Resorts, a UK mobile home park operator owned by ABN AMRO Capital.

GI Partners has bought UK caravan park business Park Resorts for £440 million (€648 million; $867 million). GI Partners is backing the current management team, led by David Vaughan, Robert Sewell and Alan Castledine.

Park Resorts is the UK’s second largest owner of caravan parks, operating 35 parks in coastal locations across the UK.

ABN AMRO Capital bought the business in December 2004 for £165 million, before merging it with GB Holiday Parks, and has since been able to increase the firm’s earnings before tax by 43 percent. The buyout firm stands to make a return of 2.4 times its original investment and an internal rate of return of 47 percent from the exit.

Close Brothers Private Equity created Park Resorts in May 2001, when it bought 12 caravan parks from Bourne Leisure for £46 million. The firm retained a small stake when it sold the business on to ABN, but has realised this stake with the sale to GI Partners.

The acquisition is GI Partners’ third UK investment from its second fund, which closed in July 2006 on $1.45 billion (€1.14 billion). The fund is already more than 60 percent invested. The other two UK investments from the fund are care provider Cambian Group and pub retailer Orchid Group.

Founded in 2000, GI Partners is based in California and London and has about $2 billion under management. Last year the London office led a deal to buy 290 pubs from Punch Taverns for £571 million (€842 million;$1.1 billion) and expects to cash in on a smoking ban in enclosed places from July 1 by converting space outside for smokers.

ABN AMRO Capital is the private equity business of Dutch bank ABN AMRO and has €2.6 billion under management. The firm has completed four European deals in 2007, but this is its first exit of the year.