PHOENIX & PORTLAND, Ore. - Casago, a premier vacation rental property management firm, and Vacasa, a leading North American vacation rental management platform, have announced a definitive merger agreement. The deal will see Casago acquiring all outstanding shares of Vacasa at $5.02 each, subject to adjustments as outlined in the merger agreement.
The transaction aims to combine the strengths of both companies to create a leading vacation rental management platform that emphasizes local, homeowner-focused property management services. The merger is expected to enhance the quality of service for homeowners and guests by leveraging the combined resources and expertise of both entities. Vacasa brings substantial scale to the merger, with InvestingPro showing trailing twelve-month revenue of $949.94 million, though the company faces challenges with profitability and cash flow management. InvestingPro subscribers can access 13 additional key insights about Vacasa’s financial health and market position.
Casago founder and CEO Steve Schwab expressed enthusiasm for the merger, highlighting the shared commitment to delivering exceptional service. Vacasa CEO Rob Greyber echoed these sentiments, stating the merger is a key step in focusing on owners, guests, and local teams.
In addition to the merger, Roofstock, a prominent proptech platform, plans to invest in the combined company. Roofstock’s CEO Gary Beasley noted the investment aligns with their mission to expand services and support the residential investment ecosystem.
The cash transaction represents a premium over Vacasa’s recent average share price and is expected to close towards the end of the first quarter or early second quarter of 2025, subject to customary closing conditions and approval by Vacasa’s shareholders. Notable existing Vacasa shareholders Silver Lake, Riverwood Capital, and Level Equity will maintain minority investments post-merger, with Roofstock providing equity commitments.
Vacasa’s common stock will be delisted from the Nasdaq upon completion of the merger, transforming the combined entity into a privately held company. Further details regarding operational and organizational aspects of the merger will be disclosed following the closing of the transaction. With a current market capitalization of $59.84 million and moderate debt levels of $129.47 million, the merger comes at a crucial time for Vacasa. For detailed analysis and comprehensive insights about Vacasa and other companies in the vacation rental sector, investors can access the full Pro Research Report available on InvestingPro.
This merger announcement is based on a press release statement and is subject to the full terms of the merger agreement, which will be filed with the SEC by Vacasa. Financial advisory services for the transaction are provided by Jefferies LLC for Casago and PJT Partners (NYSE:PJT) for the Special Committee of the Vacasa Board of Directors. Legal advisement is handled by Skadden, Arps, Slate, Meagher & Flom LLP for Casago and Vinson & Elkins LLP for the Special Committee, with Latham & Watkins LLP advising Vacasa.
In other recent news, Vacasa Inc., a prominent vacation rental management platform, disclosed its financial results for Q3 2024. Despite facing industry challenges, the company managed to secure nearly 400,000 guest reservations, generating over $300 million for homeowners during the peak season. However, these achievements were offset by a 19% year-over-year decrease in gross booking value and a decline in homes on the platform.
Needham, a significant investment firm, adjusted its stock price target for Vacasa to $3.25, down from $5.00, while retaining a Buy rating on the stock. This adjustment was due to a reduction in Vacasa’s estimated earnings before interest, taxes, depreciation, and amortization (EBITDA). Despite this, Needham remains hopeful about Vacasa’s future, citing signs of stabilization in average daily rates and the company’s shift towards a more decentralized operational model.
In addition to these developments, Needham projects a further 15% decrease in Vacasa’s gross booking value for 2025, following an estimated 19% decline in 2024. This is attributed to ongoing declines in supply and lower gross booking value per home. Despite these projections, Needham believes Vacasa can reach an EBITDA breakeven point through cost reductions and operational efficiencies. These are part of the recent developments shaping Vacasa’s journey.
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