Homair Vacances, Lessons From a Success Story

The Homair adventure illustrates well Montefiore Investment’s philosophy. Its Partners had barely launched the first fund, and were actively looking for hidden treasures in which to invest. This was a long-term undertaking designed to identify ahead of others those sectors at the crossroads of fundamental changes generating opportunities.

In Homair Vacances, a small business based in Aix-en-Provence that specialized in upscale camping, Montefiore found a company meeting their expectations.The founder, Daniel Guez, a 59 year old, was considering retirement, which was well deserved for this entrepreneur who had a turnover at the time of nearly €18 million, and an EBITDA of €6.7 million. He was much liked by his teams, benefited from an excellent reputation in the camping industry, and had been able to establish a profitable business while delivering excellent consumer experience to customers looking for a high level of comfort at an affordable price. Homair Vacances was positioned in the center of three fundamental waves related to technology, distribution and business models. First, the mobile home, which first appeared in the United Kingdom in the 1990s, represented a genuine technological breakthrough in the camping world. At the time Homair was selling almost 100% mobile-home holidays. Secondly, at the time, internet distribution only represented one per cent of the market. Homair was already drawing 20% of its bookings through this channel. Finally, his company had the potential to transform the camping business model and convert camp sites into true leisure resorts able to meet the new expectations of an increasingly demanding clientele.

“Our starting idea was to identify a suitable platform for creating a leading French company in the sector capitalizing on these three major developments,” explains Éric Bismuth.While ensuring that Daniel Guez would remain at the helm for an additional few years, the Montefiore team initially bet €8 million on the company, bought out minority shareholders and recapitalized Homair Vacances which until then had been heavily reliant on debt. “The first stage consisted in structuring the group and prioritizing growth opportunities,” explains the investor. “Our presence reassured the banks, strengthening their relationship with the company thus making it possible to start a new development phase.” The management team was reinforced with the arrival of a COO and a CFO to back up and learn from Daniel Guez. Montefiore started implementing its operational roadmap while maintaining profitable growth, with constant profit margins.

The success of Homair made it possible to consider its launch on the Stock Exchange in 2007. The aim was to accelerate further growth using additional sources of finance. The IPO valued the group at €90 million, with Montefiore’s equity six times its initial investment just two years later. Homair validated the Montefiore approach, and was a first
milestone for its LPs.

The group becomes international

From 2008, the group expanded organically into Spain, Italy and Croatia; it became stronger in France with the acquisition of new campsites which it quickly upgraded. In 2012, after a process initially designed for a full exit but that ended in the midst of the Greek economic crisis, Montefiore Investment decided to remain the majority shareholder, but Naxicap became a minority investor.

The first significant international acquisition was made in the United Kingdom. “We immediately seized the opportunity of taking over Al Fresco, the camping division of the TUI group,” recalls Éric Bismuth. Montefiore performed the due diligence, conducted the negotiations, and contributed to the success of the integration. In 2013, the internationalization of Homair enabled the group to get 25% of its turnover from international destinations like Italy or Spain. In parallel, four customers out of ten were foreigners, from the UK, the Benelux or Germany.

At the same time, Montefiore had to arrange the managerial transition of Daniel Guez. Alain Calmé, a former SME manager, who had learned from its Pierre & Vacances and BCG experiences, proved to be the perfect person to be handed the baton. He was able to infuse a spirit of conquest into the group, supported by significantly reinforced finance and marketing teams. While expanding, the management team implemented best in class rigorous processes of large listed companies but also retained its entrepreneurial spirit.

A European leader is born

A new turning point in the development of Homair came in 2014. In England, once again. As the historic market leader, the British firm Eurocamp – pioneer of the mobile home holidays – was put up for sale by Holidaybreak, its parent company. Although in 2005, Eurocamp had four times the EBITDA of Homair, by 2014, both groups were virtually the same size. “While we were pushing Homair along growth paths, Eurocamp was handicapped by its successive owners’ lack of ambition or constraints,” explains Éric Bismuth. The target nevertheless was of considerable size as Montefiore was starting its eighth year of investment. “Combining Homair and Eurocamp created an undisputed European leader, but was challenging from an execution standpoint. We discussed this at length among ourselves, then took the decision that it was impossible to ignore such an opportunity and we needed to perform the operation. But while securing the acquisition financing entirely through debt, at the same time we initiated discussions with other funds to offer to take over the new combined group.” As Carlyle’s partner in B&B, the Montefiore team made them aware of the operation taking place. “At first it was a courtesy. We were not sure it would suit them.” On the contrary, the investor came back to them a week later to inform them of their genuine interest, in particular if Montefiore would remain a minority shareholder in the equity. In three weeks, a firm and financed offer was submitted and accepted by Montefiore the same week as Homair acquired Eurocamp. Carlyle became the majority shareholder, and Montefiore retained a 30% stake.

Meanwhile, ECG has further grown to become a truly pan-European Group operating a rental fleet of over 20,000 mobile homes, across some 300 camping sites, mainly in France, Italy, Spain and Croatia. In 2018, to further support this growth, Montefiore and Carlyle announced the sale of a 40% minority stake in European Camping Group (ECG) to Ontario Teachers’ Pension Plan.

See also:

• Interview with Eric Bismuth, CEO, Montefiore Investment
• Montefiore Investment: Masters of Growth-Driven Transformation