Portland vacation management giant Vacasa said Thursday it plans to go public with a deal with an investment fund that values the company at $ 4.5 billion, putting the young company at number one. of Oregon companies.
The deal with the investment fund, called TPG Pace Solutions, will list Vacasa under the ticker symbol VCSA without the initial public offering typically associated with new stock quotes. Such arrangements have become extremely popular over the past two years as a mechanism to go public without the expense associated with a traditional IPO.
The deal is expected to make Vacasa Oregon’s most valuable new company in generations. It’s the latest in a series of public offerings in Oregon and southwest Washington that signals the emergence of a new class of start-ups that could help anchor the regional economy.
At $ 4.5 billion, Vacasa would be Oregon’s fifth most valuable company, ahead of Portland General Electric, Umpqua Bank and NW Natural.
Vacasa manages vacation properties, lists owner’s properties online, and performs cleaning and maintenance. It has over 30,000 registrations in 400 communities across the country, from Manzanita to Myrtle Beach.
Vacasa, which had already raised around $ 630 million through previous investments, will receive $ 485 million in new funding as part of its public offering.
“It’s all about the pace of the game,” CEO Matt Roberts said in an interview Thursday. He said the new funding will allow the company to significantly increase its spending on technology and adding properties to its management department.
“We’re going to be able to move forward on a long list of ideas that we have to improve the business at a faster pace,” said Roberts.
Founded in 2009 by Eric Breon, business analyst in Portland, Vacasa has grown rapidly by acquiring other vacation management companies – some large and some tiny run by families in vacation communities. Vacasa has at times been accused of small, powerful competitors, including a lawsuit last spring alleging she had waged a “smear campaign” to drive tenants away from a rival management company.
The company’s technology tracks rental bookings in its markets and dynamically adjusts prices to reflect demand. Vacasa claims this increases the income of the owners listed there, although it may also have the effect of increasing the cost of getaways for those who rent vacation homes.
Based: In 2009, by Portland business analyst Eric Breon. He started the business because he was disappointed with the property management company that ran a cabin his wife’s family owned on the Washington coast. Breon stepped down as CEO of Vacasa last year, but remains a major shareholder in the company.
Company: Vacation rental listings and property management. Vacasa lists owners’ vacation homes online and provides cleaning and maintenance services in exchange for a share of the rental fee. The company monitors the prices of its properties and dynamically adjusts rental prices online during times of high demand, which increases homeowners’ income and increases the cost of renting a vacation home.
Headquarter: Portland’s Pearl District.
Employees: 6,500, mainly in the management and maintenance of rental buildings. It had around 400 at its Portland headquarters before the pandemic.
Income: $ 491.8 million in 2020, up 64%.
Losses: $ 92.4 million, compared to a loss of $ 84.9 million the previous year.
The possession: Breakdown between Breon and several large investment firms.
Breon, 42, ran Vacasa for a decade but resigned last year. He still lives in the Portland area. Vacasa has made Roberts – previously CEO of online restaurant reservation company OpenTable – their new chef.
Vacasa employs 6,500 people, mainly managing rental properties in vacation communities, and 400 in Portland. Its Pearl District headquarters reopened this week for employees who choose to return voluntarily.
Roberts and Vacasa CFO Jamie Cohen live in California. Roberts said on Thursday that Vacasa was a distinctly Oregon-based company, but said its workforce would remain distributed after the pandemic.
“Things are further away than they have ever been,” he said. “We are not unusual in this area. This trend is now well established in a ton of different companies.
Vacasa first disclosed its financial results Thursday as part of its pending public offering, bringing in $ 492 million in revenue last year and a loss of $ 92 million.
It is common for young, fast growing companies to lose money when investing in their growth, but investors will be watching carefully to ensure that Vacasa has the path to profitability.
Vacasa had $ 290 million in cash at the end of March, according to financial documents, and $ 458 million in long-term debt.
On Thursday, Roberts said Vacasa was spending aggressively to introduce new properties to its management portfolio. This spending will continue indefinitely, he said, but Vacasa predicts that the contribution from each new property will soon exceed the money coming out of the gate. Roberts said the company expects to be profitable based on a measure of its cash flow in 2023.
Vacasa will list its shares through a mechanism known as a Special Purpose Acquisition Company, or SPAC. Vacasa will absorb the stock exchange listing of investment fund TPG, which is already traded on Wall Street. It has become a fashionable way to facilitate stock quotes as an alternative to a traditional IPO.
Vacasa said Breon and other major shareholders, including six large investment firms, would retain their shares in Thursday’s deal. They will collectively own 88% of the company after the transaction.
The Portland-based company said it had not determined which exchange would list the stock. He plans to close the deal this fall.
The COVID-19 pandemic initially rocked Vacasa’s business, causing a sharp drop in income in the spring of 2020. But it soon became clear that people could still travel for vacations and that individual incomes remained strong during the pandemic. , generally.
Indeed, Vacasa said its revenues increased by 64% last year. and it forecasts 54% growth this year and around 30% in each of the next two years, surpassing $ 1 billion in revenue as of 2022.
Oregon hadn’t produced a new large state-owned company since the 1990s. But now it has two on the bridge, with the Grants Pass-based Dutch Bros. drive-thru coffeehouse chain pursuing a conventional IPO. .
Last year, Vancouver-based marketing data broker ZoomInfo went public with the region’s largest IPO ever. This business is now worth over $ 21 billion.
And earlier this month, Vancouver-based biotech startup Absci went public in an IPO that valued the company at around $ 2 billion.
Wilsonville’s clean energy start-up ESS Tech also plans to go public this fall. Like Vacasa, ESS will be listed through a SPAC transaction. ESS is a small company that still strives to demonstrate its technology and find a market, but the deal it offers would value the company at $ 1.1 billion.
The series of agreements, from four very different industries, suggest that the region’s economy remains strong despite the pandemic. And that suggests that even as Oregon’s economy remains in the shadow of its Seattle and Bay Area neighbors, it is once again capable of growing new and big businesses.
— Mike Rogoway | [email protected] | Twitter: @rogoway |