Go down to the woods for a family holiday

The planned expansion of Forest Holidays could create jobs in rural Yorkshire, as more British families choose to holiday at home during a period of economic turmoil in Europe.

The mid-market private equity firm LDC yesterday announced that it had completed a significant investment to support the management buyout and growth of Forest Holidays, which specialises in providing exclusive rural holiday accommodation.

The deal, which is for an undisclosed sum, enables existing shareholder The Camping and Caravanning Club to exit the business, while the Forestry Commission will retain a significant shareholding.

Established in 2006 and based in Moira in Derbyshire, Forest Holidays has 315 cabins based in seven Forestry Commission estates across the UK – Argyll and Strathyre in Scotland, Cropton Forest and Keldy in North Yorkshire, the Forest of Dean and Sherwood Forest and Deerpark Forest in Cornwall.

Gary Fletcher, the chief executive of Forest Holidays, said: “There are a pipeline of sites ready to be developed.”

Mr Fletcher said the Cropton site, which is near Pickering in North Yorkshire, could undergo further development, which might lead to jobs.

“With a shareholder like the Forestry Commission, we need to protect the environment, first and foremost,” he added.

All of Forest Holidays’ cabin sites are eco and environmentally sensitive and based in woodland and lakeside locations. The cabins sleep between two and 10 people, in a mixture of single-storey, two-storey and treehouse accommodation.

The majority of cabins have private outdoor hot tubs, as well as indoor log burning stoves and underfloor heating. In the past two years, the business has added more than 150 cabins to its portfolio, with 76 in the Forest of Dean, 19 in North Yorkshire and 65 in Sherwood Forest, which opened earlier this year.

According to LDC, the business is well-positioned for growth, with a strong portfolio of existing site locations and record booking levels.

LDC is backing Forest Holidays’ existing management team, which is led by Mr Fletcher. As part of LDC’s investment strategy, the existing management team will be supported by the appointment of Peter Phillipson as non-executive chairman. Previously chairman of The Tussauds Group, Mr Phillipson has worked with a number of private equity backed companies.

The deal will provide the capital required to help support the growth of Forest Holidays through a sales and marketing programme, alongside a cabin building programme which will include new sites in the UK.

The deal was led by LDC’s UK new business managing director Martin Draper, together with investment directors Andy Grove and Matthew Norrington. Mr Draper and Mr Grove will join the board with immediate effect.

Mr Fletcher said: “Our business has shown an encouraging resilience to the challenging economic conditions, with an increasing number of customers choosing to take UK-based short, exclusive and away-from-it-all breaks.

“LDC’s investment and support brings additional strategic input and financial backing to our business and will help us to deliver our ambitious growth plans.”

He predicted the company, which has more than 100 staff, could have 800-plus cabins in three to five years. In December 2009, the Leeds-based Evans Property Group entered into a 125-year lease of part of the Forest of Dean and worked in collaboration with Forest Holidays to create the company’s largest single development.

Mr Fletcher said he was impressed with the way the Evans team had grasped the concept behind Forest Holidays.