Blackstone sells Butlin’s back to former owner in £300mn deal

Blackstone sells Butlin’s back to former owner in £300mn deal

Blackstone has agreed a £300mn deal to sell Butlin’s back to one of the families that it bought the UK resort group from last year.

The US private equity group will sell Butlin’s, which operates holiday centres in Skegness, Minehead and Bognor Regis, to the Harris family, it said on Tuesday.

The family is one of three that founded Bourne Leisure, the parent company of Butlin’s, in 1964 and sold it to Blackstone last year at a valuation of about £3bn, while keeping a minority stake. Bourne also operates the Haven and Warner Leisure holiday businesses, which will remain in Blackstone’s hands.

The deal comes as an economic downturn and cost of living crisis hit families’ finances. That could drive more people towards the budget offering from Butlin’s, but it also risks leaving some existing customers less able to afford breaks.

Official government projections, produced last year, predicted that UK domestic tourism would rebound to pre-pandemic levels by the end of 2023. But industry figures say the recovery has been faster than expected.

Still, uncertainty remains over the impact of the cost of living crisis. About 62 per cent of Britons surveyed by VisitBritain, the UK’s tourism board, at the start of September said costs and finances were their biggest barrier to booking an overnight UK trip in the next six months.

More than a third of UK adults surveyed said they were likely to choose cheaper accommodation or spend less on eating out.

The Harris family is buying the Butlin’s operating business. Blackstone sold resort group’s real estate assets in July in a £300mn deal with the UK’s biggest private pension fund, the Universities Superannuation Scheme. Butlin’s accounts for about 15 to 20 per cent of Bourne’s earnings, a person with knowledge of the matter said.

Blackstone will use the money from the sale to upgrade existing Haven and Warner sites and buy more, said Lionel Assant, head of its private equity business in Europe. “Butlin’s is in a strong position to take advantage of the continued growth in the staycation market, and I have no doubt it will continue to flourish,” he said.

Butlin’s was founded in 1936 by Billy Butlin, who aimed to provide affordable seaside breaks for working-class families. Bourne, co-founded by the Harris, Cook and Allen families, acquired it in 2000.

“We are delighted to reaffirm our love for Butlin’s and once again be the new owners of this great brand,” said Paul Harris, the son of Bourne co-founder Peter Harris.

Blackstone bought Bourne at a time when it had been hit hard by lockdowns and travel restrictions during the Covid-19 pandemic. It has previously bought UK leisure companies including Legoland operator Merlin Entertainments.

Private equity groups have ploughed into the UK’s domestic holiday market in recent years, but these deals have become harder in the past few months as debt markets have turned. An auction process to sell rival Parkdean Resorts, which Bourne had made an early-stage bid for, was called off in June.

Quoted from Various Sources

Published for: Ipodifier