Ares supplies £150m second lien loan in Parkdean deal

Onex’s £1.35bn acquisition of Parkdean Resorts was backed by a £750m debt package made up from a group of five banks and Ares, which provided a £150m second lien loan to support the acquisition.

A group of five banks and Ares Management have collaborated on a loan totalling £750 million ($924 million; €890 million) supporting private equity group Onex’s acquisition of UK-based holiday manager Parkdean Resorts.

The credit facility is part of the overall £1.35 billion financing package paid by Onex to existing private equity groups Epiris (formerly Electra) and Alchemy as well as the management team, which owns a minority stake in the holiday operator.

Onex is investing $750 million of equity from its Onex Partners IV fund.

Bank of America Merrill Lynch, Barclays, JP Morgan, Royal Bank of Canada and Sumitomo Mitsui Banking Corporation clubbed together on a £600 million senior loan, while Ares Management provided £150 million for the second lien, according to a report by Reuters later confirmed by a source familiar with the situation.

Ares declined to comment on the details of the loan. Onex did not immediately respond to a request for comment on the debt financing.

The leading banks in the loan are expected to syndicate parts of it in the new year, Reuters claimed.

The acquisition of Parkdean, a company operating caravan parks across the UK, is expected to close in the first quarter of 2017, pending regulatory approval. The company manages 73 parks and sells more than 500,000 holiday packages to consumers every year.

“Parkdean Resorts has built the market-leading affordable holiday park business in the UK, with a strong base of loyal customers in an attractive segment of the domestic holiday market,” said Tony Morgan, a managing director at Onex.