Hg buys Hoseasons from ECI

ECI Partners has sold UK tour operator Hoseasons to HgCapital in a £40m secondary buyout, making more than four times its original investment from the deal.

ECI Partners, the UK-based small and mid-cap buyout firm, has sold its interest in Hoseasons Holidays Group, the UK tour operator it acquired in 1999.


The business, which ECI acquired for £22m, is being sold to funds managed by HgCapital, which outbid rival offers from Barclays Private Equity and Cendant, which owns rival English Country Cottages.


HgCapital has agreed to pay up to £40m for the business, depending upon future performance. Debt facilities have been provided by Bank of Scotland Corporate Banking. The shareholders of Hoseasons were advised on the transaction by NM Rothschild. HgCapital was advised by Corporate Finance KPMG.


Hoseasons specialises in self-catering holidays in the UK and Europe. The company sells more than a million holidays a year and during the last three years has seen turnover increase to over £120m.


“Hoseason’s has faced some challenging times over the past few years, including the BSE crisis and September 11,” said ECI’s Chris Watt. “The company has risen to these challenges impressively, consistently beating its own forecasts and consolidating its position within the UK holiday sector. From ECI’s perspective, Hoseasons has proven to be an extremely successful investment, generating a return of over 4 times the original investment.”


Jeremy Sharman, director, HgCapital commented: “Hoseasons is a highly respected brand in the UK travel market. Our investment comes at a time of increased demand for ‘tried and tested’ UK holidays and greater willingness by UK customers to book self-catering holidays overseas.”


UK tour groups, particularly those with a sub-£50m enterprise value, have been much sought after by private equity players in 2003. In January, ECI acquried Kirker Holidays, a provider of European short-breaks, for £15m.


Also active in the market have been 3i, which acquired Leger Holidays for £22m earlier this year. Both 3i and HgCapital were among a number of interested parties in Cresta Holidays, part of the MyTravel group.