Vacasa is expanding its vacation rental industry footprint in a big way.
The Portland, Ore.-based company will pay approximately $162 million to acquire Wyndham Vacation Rentals from publicly-traded Wyndham Destinations. The deal includes $45 million in cash and $30 million in equity. It is expected to close this fall, with full integration taking place in fall of 2020.
The two companies are similar, both operating vacation rental properties across North America. Vacasa will increase its portfolio of homes by 9,000 as a result of the acquisition.
Brands under Wyndham Vacation Rentals management include Hatteras Realty, ResortQuest, ResortQuest Whistler, Smoky Mountains Property Management, Kaiser Realty, Corolla Classic Vacations, and Vacation Palm Springs.
“We are excited to partner with the pioneering company in the short-term rental industry that helped make vacation homes popular for so many families around the world,” Vacasa CEO Eric Breon said in a statement. “Combining Wyndham Vacation Rentals’ decades of operational excellence with Vacasa’s next-generation technology will deliver the industry’s best vacation rental experiences.”
Wyndham Destinations bills itself as the world’s largest vacation ownership and exchange company. It reported revenue of $1 billion in the second quarter and net income of $118 million. Revenue from its “rental and other revenues” segment came in at $69 million in Q2, down 4 percent year-over-year.
On the company’s earnings call Tuesday morning, CEO Michael Brown said the deal will help Wyndham Destinations focus on its core timeshare business.
“We determined that selling Wyndham Vacation Rentals is the best option to return value to shareholders and enable the long-term growth of our company through vacation ownership and exchange,” Brown said in a statement. “We remain so confident in the future of this business and the benefits of a long-term relationship with Vacasa, that we will have an equity interest in Vacasa after the sale.”
Founded in 2009, Vacasa is the largest vacation rental company in North America. The company managed more than 14,000 homes around the world and employed more than 3,300 people prior to today’s deal, which boosts the number of homes on its platform to 23,000.
Vacasa is similar to companies such as Airbnb, which is valued at more than $30 billion, and HomeAway, which was acquired by Expedia for $3.9 billion in 2015. But it’s not just a marketplace — it is a “full-service property management company,” helping homeowners manage the entire booking process from start-to-finish. The company employs thousands of people across its markets for on-the-ground “field-based roles” — housekeepers, reservations agents, local managers, etc.
Vacasa actually counts Airbnb and HomeAway as partners, providing inventory for their marketplaces.
The company’s platform is powered by lots of technology; it uses proprietary yield management software that updates price rates daily based on hundreds of variables like weather, events, competitor pricing and occupancy, regional demand trends, season demand curves, and more. The idea is to maximize revenue for property owners that list homes on Vacasa.
Vacasa said today that it expects to reel in more than $1 billion in gross bookings and more than $500 million in revenue over the next year.
Vacasa raised a $103 million Series B round in 2017, and a $64 million Series C round this past October. The company, ranked No. 2 on the GeekWire 200, bootstrapped for six years but has raised more than $200 million since 2016. Investors include Riverwood Capital led the round, Level Equity, NewSpring, Assurant Growth Investing, and others.
Vacasa has acquired 150 companies over its lifetime. It has previously talked about going public.
“That is something we are continuing to prepare for,” Breon said when the company raised $64 million in October. “When you look at the scale of the market opportunity, the scale of our company as it is today, and the scale of the opportunity looking forward, that is what we believe makes the most sense for the company.”
Vacasa recently expanded with a new apartment leasing offering and hired a chief financial officer, along with a chief information security officer. It also this year added former OpenTable CEO Matt Roberts to its board. Last year it moved into a new headquarters in Portland.