Target Information

The European Camping Group (ECG), established in 1989, is a leading player in the mobile-homes holiday rental market in Europe. The company generated consolidated revenues of €230 million in 2017 and operates a substantial rental fleet comprising over 20,000 units, with more than 90% of these units being mobile homes. These units are strategically located across approximately 300 campsites throughout Europe, primarily in France, Italy, Spain, and Croatia. ECG offers a diverse range of holiday solutions through five distinctive brands: Eurocamp, Homair, Al Fresco, Roan, and Go4Camp, as well as through its distribution platforms, Allcamps and Lux-camp.

Industry Overview

The mobile-homes holiday rental industry in Europe has experienced significant growth, driven by an increasing demand for flexible and affordable vacation options. This trend has been further accelerated by changing consumer preferences that favor outdoor holidays and the experience of nature, particularly among younger demographics. The industry's appeal is reinforced by the convenience it offers, with mobile homes providing comfort and amenities similar to traditional accommodations while being set in picturesque locations.

Countries like France, which has a rich heritage in camping and outdoor activities, continue to dominate the market, contributing significantly to overall revenue generation. Italy and Spain have also witnessed rising popularity in the mobile-homes segment, as families and travelers look for economical ways to experience the outdoors. Croatia presents enormous growth potential as it becomes an increasingly sought-after summer destination, making it a key market for ECG.

The European camping market is characterized by a mix of small local operators and large international players, with ongoing consolidation trends expected as companies seek to enhance efficiencies and expand their operational footprint. The industry is projected to continue evolving with a focus on sustainable tourism and improving customer experiences, positioning leaders like ECG favorably for future growth.

Rationale Behind the Deal

Ontario Teachers’ Pension Plan (OTPP) has committed to acquiring a 40% minority stake in ECG with the intent of bolstering the company’s organic and external growth strategy within a flourishing market. This investment aims to leverage ECG's robust market position while fueling its growth plans through consolidation, enabling the company to enhance its operational efficiency and expand its presence across Europe.

Information about the Investor

The Ontario Teachers’ Pension Plan (OTPP) is one of the world's largest and most respected pension funds, managing over CAD 200 billion in assets. OTPP is committed to ensuring the long-term sustainability of members' pensions through diversified investments across various industries. With a strong interest in private equity investments, OTPP's strategy focuses on identifying high-growth opportunities that align with its long-term investment goals.

The Carlyle Group, known for its global alternative asset management expertise, maintains a majority stake in ECG alongside Montefiore Investment. With over $195 billion in assets under management, Carlyle operates across multiple sectors and geographies, focusing on driving value for its investors, primarily pension funds. Montefiore Investment, operating since 2005, specializes in mid-market investments in France, showcasing a strong track record of supporting small and medium-sized enterprises towards achieving European leadership.

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This investment presents a strategic opportunity for OTPP to enter a robust and growing segment of the European leisure market. ECG’s established brand presence and market leadership indicate strong potential for future revenue growth, particularly with favorable consumer trends shifting towards more outdoor-centric vacations. As the industry continues to evolve with an emphasis on sustainability and unique customer experiences, ECG is ideally positioned to capitalize on these trends.

Furthermore, the deal facilitates a partnership with experienced investors like Carlyle and Montefiore, who bring a wealth of knowledge and resources that can support ECG’s expansion plans. This collaboration is likely to enhance operational capabilities and open new markets, leading to improved competitive positioning.

On the downside, potential risks include economic fluctuations and changes in consumer preferences that could impact holiday spending. Still, if managed effectively, this investment could yield significant returns, making it a potentially wise choice for OTPP in diversifying its portfolio.

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