Monday 2 August, 2021 - Weekly round-up

Vacasa to go public via $4.5bn SPAC merger

Vacation rental management platform Vacasa will go public later this year via a $4.5 billion merger with special purpose acquisition company [SPAC] TPG Pace Solutions.   

EDITOR'S COMMENT

• As was already rumoured, management platform Vacasa is the latest travel company seeking to capitalise on surging US consumer interest in the vacation rental space by joining the growing list of startups and firms going public via SPAC mergers. 

The transaction, due to close this year and give Vacasa an equity value of $4.5 billion, will generate $485 million in fresh funding for the combined company, as well as position it for future growth in a highly fragmented market. Despite managing 30,000 vacation homes, mainly in the United States, Vacasa has completed a pair of major acquisitions in the last two years to substantially increase its inventory - purchasing Wyndham Vacation Rentals for $162 million in 2019 and TurnKey Vacation Rentals in April.

With plenty of cash left in the bank, it would be no surprise to see Vacasa make further mergers and acquisitions, especially given the frenzy of activity already seen in the short-term rental space in the first half of the year. Vacasa's investor presentation also suggests that the company is planning to re-enter Europe, from which it retreated at the start of the pandemic, but it would face stiff competition from the likes of Sykes Holiday Cottages and Awaze which dominate much of the supply in European leisure markets.

Meanwhile, the SPAC boom, seen by some as a time-efficient and less risky route to the public markets than initial public offerings [IPOs], shows no sign of relenting. This year, lodging company Sonder will go public via a SPAC merger at a $2.2 billion valuation, distribution channel HomeToGo is merging with Lakestar SPAC I in a €1.2 billion transaction, and private travel club Inspirato is merging with Thayer Ventures at a $1.1 billion valuation.

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