Vacation rental management giant Vacasa, which over the past few years has grown into the largest company of its kind in North America, announced Thursday it plans to go public via a merger with a blank-check company.
The merger values Vacasa a $4.5 billion and will see the rental management firm combine with TPG Pace Solutions. After the deal, Vacasa will have $485 million in cash — which it will get from both TPG Pace Solutions and other investors — and plans to use the money “to fund the company’s future growth plans.”
Matt Roberts
Vacasa CEO Matt Roberts said in the statement that partnering with TPG Pace Solutions “will help accelerate our growth and the enhancement of our technology offerings for homeowners and guests.”
Founded more than a decade ago, Vacasa offers a variety of short-term rental services. The company focuses on real estate in vacation-oriented destinations, and will handle guest bookings and management for property owners who want to rent out their homes either full time or when not occupying the properties themselves. Over the years, the company has also branched out into managing entire vacation-oriented communities, as well as into various other ancillary services such as interior design.
Eric Breon founded Vacasa and served as the company’s CEO until last year when he stepped down. Vacasa then hired Roberts, who had previously worked as the CEO of restaurant booking firm Opentable.
By 2018, Vacasa had become the largest vacation rental management company of its kind in North America. The company has since continued growing via an aggressive series of acquisitions that include TurnKey Vacation Rentals and Wyndham Vacation Rentals.
In Thursday’s statement, Vacasa said it anticipates bringing in $750 million in revenue in 2021, and will ultimately help consumers book more than 5 million nights in vacation properties. The company also said in its statement that it believes revenue will grow to $1.3 billion by 2023.
Vacasa allows travelers to book stays on its own website, but also partners with third party portals such as Airbnb, Vrbo and Booking.com.
Thursday’s announcement is also part of a trend that has seen numerous firms hit the stock market via a mergers with what are known as special acquisition companies (SPAC), or blank check companies. The deals allow companies to begin selling shares while skipping the more laborious process of holding a traditional initial public offering (IPO). The SPACs — so, companies such as TPG Pace Solutions — don’t produce or do anything on their own and form solely with the objective of finding another company to merger into.
These kinds of deals have become especially popular for real estate-focused technology companies. Last week for example, 3D imaging firm Matterport wrapped up its own SPAC deal and began selling shares. IBuyer Opendoor also went public via a SPAC merger in December, while rival Offerpad will follow suit later this year when it merges with a SPAC started by Zillow co-founder Spencer Rascoff.
In this case, TPG Pace Solutions is a SPAC formed by TPG, a global property management company that oversees $96 billion in assets.
Karl Peterson
In a statement, Karl Peterson — TPG Pace Solutions’ director and non-executive chairman — praised Vacasa for establishing “a strong strategic position in a large, fragmented market.” He also said he envisions future growth for Vacasa.
“Leveraging our extensive public market experience,” Peterson added, “we believe our partnership will further solidify Vacasa as a scaled hospitality brand in vacation rentals. We’re excited to work with Matt and the entire Vacasa team as we transition the company to the public equity marketplace.”
