Vacation rental management platform Vacasa is going public through a merger with a special purpose acquisition company in a deal that values the Portland company at $4.5 billion.
Vacasa is merging with TPG Pace Solutions, a SPAC created by private equity firm TPG. Vacasa’s existing investment group, along with founder Eric Breon, will retain 88% ownership of the company after the deal. Vacasa will trade under the ticker: VCSA.
As a result of the deal, Vacasa will receive about $485 million in gross cash that will be used to further grow the company with additions to technology and staff.
This deal announcement marks the second Oregon company to jump into public markets using a SPAC. Earlier this year, energy storage company ESS Inc., announced its intent to go public via ACON S2 Acquisition Corp. That deal is on track to have the company trading sometime in late September or early October.
Vacasa’s deal is also expected to close this fall, according to a company spokesperson.
Vacasa has been a fast-growing company since it started in 2009. It seemingly came out of nowhere in 2014 when it was named the fastest growing private company locally and was a Top 10 fastest growing private company in the country on the Inc. Magazine list. The company also kicked the region’s fundraising into high gear in 2017 when it raised $103.5 million in a single round, an almost unheard of feat locally.
The company differentiates itself from others in the vacation rental market by not only marketing and connecting consumers with homes to rent, but by also managing those homes for the homeowners. Vacasa provides maintenance, booking and marketing and guest services. It uses a proprietary technology to set the best price for a specific unit to ensure booking and, according to the company, to maximize profit for the homeowner.
The company has raised a total of $634.5 million. Investors including Silver Lake, Riverwood Capital, Level Equity, Altos Ventures, Adams Street and NewSpring Capital are all retaining shares in the transaction.
The company expects to generate $1.6 billion in gross bookings this year. That number includes the amount given to homeowners. It expects $750 million in 2021 revenue with more than 5 million nights sold, according to a news release. Vacasa expects to hit $1 billion in revenue in 2022, according to CFO Jamie Cohen.
“So far this year, we are seeing great strength out of the gates both in our supply growth and in guest demand. People are excited to get back to traveling with the macro environment starting to normalize and we’re seeing all-time high booking weeks. The snapback in travel has been stronger than we originally thought when we first entered the year, and we are really optimistic about where the sector is headed,” she told industry analysts on a call regarding the transaction.
The company has more than 30,000 homes in its inventory.
At the start of the Covid-19 pandemic Vacasa made steep cuts ahead of the uncertainty surrounding the pandemic, travel restrictions and stay-at-home orders. However, by the fall of 2020 the business had rebounded with consumers eager to travel and stay in individual accommodations.
“As more second homeowners share their homes with guests for the first time, and travelers increasingly prefer to stay at vacation rentals, we believe our partnership with TPG Pace Solutions will help accelerate our growth and the enhancement of our technology offerings for homeowners and guests,” said CEO Matt Roberts in a written statement.
Both sides of the deal pointed to TPG’s deep track record with taking companies public. If this deal closes it will be the sixth such transaction for the firm, said Karl Peterson, non-executive chairman and director of TPG Solutions, on a call with industry analysts. TPG has sponsored seven transactions, one is still waiting to close.
As a result of this deal, Peterson is joining the Vacasa board.
Vacasa’s announcement also signals another public markets debut for the region. Such activity has been slow for years but has started to trickle in since 2017. However, 2021 started with huge potential and now there are five companies that have either filed to go public or stated an intent to go public this year.
One of those companies, Vancouver-based Absci made its debut July 22 and raised $210 million.
