India’s largest vacation ownership company Mahindra Holidays & Resorts India Ltd has inked a definitive agreement to initially acquire 18.8 per cent equity stake in Finland-based Holiday Club Resorts Oy, with the right to increase its stake holding in the company over two years, according to a statement.
The financial details of the transaction remain undisclosed. The deal, which is subject to necessary regulatory approvals, is expected to be completed in a month.
Once full ownership is achieved, the combined entity will have the potential to become the largest vacation ownership firm in the world, outside the US, the company said.
Holiday Club Resorts Oy is amongst the leading vacation ownership companies in Europe with 32 resorts and 1,700 holiday homes. As many as 24 of its resorts are located in Finland, two in Sweden and six in Spain (1 in Costa del Sol and 5 in Gran Canaria).
Seven of these resorts have spa hotels with indoor water parks, three have golf course and there are five indoor theme parks for children called ‘Angry Birds Activity Parks’. Holiday Club has a membership base of around 50,000 families and is a leading leisure brand in Europe. Recently, Holiday Club has also successfully begun selling fractional membership.
During the financial year 2012-2013, the consolidated turnover amounted to €120 million, and the Group employed 716 people.
The company is owned by its acting management, Varma, Finnish Industry Investment Ltd, Ilmarinen, the Fennia Group and a group of Finnish private investors.
The deal includes fresh share issue to Mahindra Holidays besides purchase of part shares from existing owners. Mahindra Holidays will also get board representation.
“This timely acquisition not only provides access to European assets, technology and processes, but more importantly, a springboard to Mahindra Holidays for growth in Europe and other international destinations,” Mahindra Group Chairman Anand Mahindra said in the statement.
Mumbai-based Mahindra Holidays is a part of the multi-billion dollar Mahindra Group and runs hotels and resorts under the Club Mahindra brand. The company offers family holidays, primarily through vacation ownership memberships.
Early last year, in its bid to increase its presence overseas, the company acquired a 49 per cent stake in Dubai-based Arabian Dreams Hotel Apartments which is a 75-room property.
Last November it divested stake in two Austria-based companies—BAH Hotelanlagen AG and MHR Hotel Management GmbH. However, post divestment, the existing arrangement of room inventory of Bon Alpina in Innsbruck, Austria owned by BAH Hotelanlagen AG was continued.
Back home the firm has been more active in acquiring properties. Recently, it acquired a 60-room resort in Manali, owned by Competent Hotels Private Limited, for an undisclosed amount.
The company ended FY14 with revenue of Rs 816 crore with net profit of Rs 87 crore.
Shares of Mahindra Holidays & Resorts closed the day at Rs 329.25, up 2.97 per cent from the previous close on BSE in a strong Mumbai market on Monday.
(Edited by Joby Puthuparampil Johnson)