Nostalgia may not be the most frequent emotion felt by lawyers in their day-to-day work, but Dean Peachey was cast back to childhood holidays as he navigated Blackstone Capital Partners’ £3bn acquisition of Bourne Leisure Group.
The deal, which saw the global investment business hoover up a leisure group comprising Butlins, Haven and Warner Leisure Hotels was the largest hospitality and leisure deal in UK history.
“The deal was interesting because the asset class – caravan and holiday parks – was unusual. Each site had its own interesting nuances and brought back childhood memories of trips to Butlins”, Peachey recalls.
“The transaction further developed my expertise within the hospitality and leisure sector, particularly in dealing with the nuances of caravan parks. The main challenge was working towards the tight timeframe that was imposed on us by all of the parties involved. We worked collaboratively as a ‘one UK’ team to ensure that our reporting was succinct and precise and that the advice given was commercial. There was an additional challenge in procuring a long list of title defect policies for the sites.”
DLA has worked with Blackstone since 2000, across a number of its assets and platforms. This was initially on a UK deals basis only but as the firm did more deals for the client, and the relationship grew, the remit quickly expanded to encompass its entire international platform.
In 2019 the firm appointed Jo Owen who returned to DLA Piper’s real estate team from Proskauer. Owen had a close client relationship with Blackstone, being a specialist in private equity transactions and being involved in numerous landmark transactions in the UK and internationally. Her return helped cement the relationship with Blackstone and resulted in a great increase in instructions from the client on the leadup and throughout the pandemic.
The mandate for the Bourne Leisure Group acquisition included all aspects of the real estate advisory work surrounding it, spanning 56 UK properties held by the target group, comprising 36 companies. DLA prepared the real estate sections for the acquisition agreements and advised on the necessary wording for the finance documents, including dealing with conditions precedent and subsequent. The firm guided the client through a multitude of operational issues relating to the sites including licensing; the granting of occupation rights to pitch holders; planning and Caravan Site Act licences, implications of covid-19 loans and furlough measures and many others.
Outside of real estate, the firm led on many other due diligence areas, including corporate; environmental; employment; regulatory and IP issues.
Bourne Leisure Group is a leader in the UK domestic holiday market, employing over 16,000 people, hosting 25,000 holiday-home owners, and attracting 4.5 million guests to 56 sites across the UK every year. It operates through its three brands, Haven, Butlin’s and Warner Leisure Hotels.
Haven is the largest UK caravan operator with 38 holiday parks and 2.5 million visitors a year. The scale of the group is vast, with more than 15,000 UK employees working across the Bourne Leisure Group. All aspects of the core deal were handled solely by DLA Piper, which enabled us to achieve the tight timescales required to complete this significant transaction for the client. These included due diligence, corporate, commercial, IPT (including GDPR), health and safety, regulatory (two regulated entities as part of the group), employment and pensions.
Blackstone has a proven investment track record in the wider hospitality, travel and leisure sectors, including its prior investment in Center Parcs and current ownership of Merlin, which has grown to become the second largest operator of visitor attractions and theme parks globally. DLA Piper acts as Merlin’s sole legal provider for construction legals, including advising on all construction projects in the UK, Europe, Middle East and Asia‐Pacific. Its remit includes advising on all of Merlin’s new resorts, hotels and other brand attractions, including Legoland, Sea Life, Madame Tussauds, Alton Towers, Thorpe Park, Chessington World of Adventure, Shrek Adventures, Dungeons, The Eye, Warwick Castle and the Bear Grylls Adventure.
Blackstone is opportunistic investor, meaning that when a suitable opportunity arises, it needs to be able to analyse, bid and, if successful, complete on deals as quickly as possible. This level of efficiency has to extend to its preferred legal providers. The fact that DLA Piper was chosen to conduct this historic deal is testament to its ability to complete deals in ambitious timeframes, while ensuring total confidentiality.
Peachey joined DLA Piper in September 2015, qualifying into the real estate team after completing his training contract at Walker Morris. “I work on a wide variety of transactions from cross-border portfolio acquisitions and disposals to commercial developments. I acquire and dispose of both freehold and leasehold properties across a range of sectors including hospitality and leisure, industrial, corporate occupier and energy”, he says.
“I have worked with the vast majority of partners across the UK real estate team including Andrew Clarke, Tim Field, Ruth Williamson, Susan Samuel, Jo Owen, Steve Edgecombe and Lorraine Reader. Large transactions I’ve worked on include, the disposal of QHotels for around £580m, the disposal of The Priory Group, the acquisition of The Car People and The Car Shop by Sytner Group, the acquisition of a portfolio of solar farms and wind farms for VPower and the acquisition of airport hangars for Jet2.com.”
Hospitality and leisure has been a particular focus for Peachy in recent months, as he explains: “Recently, I have advised Lamington Group on the sale and leaseback of its aparthotel in Southampton and I’m currently advising the group on its refinancing of its aparthotel in Chiswick. In light of COP 26, I have also been advising clients on the installation of electric vehicle charging points across various portfolios.”
While the Blackstone deal completed just prior to lockdown, Peachy has had to adapt since then. “The real estate group worked collaboratively throughout the pandemic. We maintained regular contact via Zoom and Microsoft Teams to ensure the advice we gave was consistent and commercial”, he says. “Face to face contact isn’t always required to get the job done – but I am looking forward to reconnecting with clients and contacts in a post-pandemic world. There’s nothing better than having a pint with a client on a Friday afternoon!”
DLA Piper’s UK real estate sector experience meant the firm approached the Blackstone deal with absolute confidence it would be able to deliver. Blackstone is said to have been particularly impressed by the fact that all aspects of the deal were carried out in-house, resulting in greater efficiency and confidentiality, two highly rated factors for the client.
Alongside a record value, the investment signalled a vote of confidence in the UK’s holiday and “staycation” sectors. Despite having been decimated by the covid-19 pandemic, the sectors are looking forward to a potential boom as vaccinations in the UK allow domestic travel to restart. DLA anticipates many more UK hotel and leisure deals to follow as the sector starts to stabilise and it hopes to be well placed to win mandates in this area.
The deal also marked one of the largest recent funding operations in the market, with Starwood Capital Group (who DLA regularly advises on acquisitions and various hotel issues) ultimately originating £1.8bn term loan for the acquisition. Extra work was required by legal advisors because of the large number of prospective funders, funding routes and actual funders involved, alongside the client’s wish to maintain competitive tension between them.
For DLA, 2020 saw a continuation of high value transactional work for opportunistic investors. It was also an impressive representation of UK’s new “hot asset classes” such as data centres, science parks, logistics and PRS.
Some more notable deals included advising Oxford Properties on the corporate acquisition of the entire M7 platform and all directly-owned real estate. The purchase, which exchanged in December 2020, included a large portfolio of logistics and light industrial sites around the UK, plus the iconic “Mailbox” in Birmingham, together with all of the 400+ fund interests and managed accounts for an undisclosed value.
This deal was vital in order for the client to acquire a vehicle to launch a wider logistics platform across a multiplicity of countries.
About Dean Peachey
2020-present: Senior associate, DLA Piper
2015-20: Associate, DLA Piper
2013-15: Trainee solicitor, Walker Morris
Who’s Who: the DLA Piper team
Partner Jo Owen supported by a cross-practice team, including: Susan Samuel, Ruth Williamson and Ben Taylor (real estate); Stephen Malley (construction); Rob Salter, Caroline Magor and Cameron Spittal (corporate); Tamara Calvert (employment); Matt Duncombe and Sophie Lessar (IP); Tony Katz (litigation & regulatory); and Teresa Hitchcock and Robert Forsyth (employment).