Vacasa, the vacation rental management service, will buy Wyndham Vacation Rentals from Wyndham Destinations, the companies said Tuesday.
Vacasa will pay $45 million in cash at closing and will give Wyndham Destinations up to $30 million of equity interest in the newly formed company. Vacasa will pay the remaining balance in either seller financing or cash, for a total of $162 million in value.
The deal is a milestone for the Portland, Oregon-based Vacasa and its founder and CEO Eric Breon. It nearly doubles the startup’s inventory to more than 23,000 homes.
The transaction makes Vacasa the largest property management service provider in North America’s vacation rental sector by revenue, though Vacasa also manages properties in some locations outside of North America.
In recent years, Wyndham Destinations decided to off-load its vacation rental businesses to instead focus on its vacation ownership and exchange, or timeshare, business.
Wyndham Vacation Rentals accounted for $237.5 million of revenue for Wyndham Destinations in 2018, or about 6 percent of the company’s revenue that year.
While the numbers are approximate, they do suggest the challenge facing Vacasa. Can it truly use its technologies and best practices to wring enough inefficiencies out of the Wyndham Destinations portfolio of properties to significantly boost earnings and profit at a pace that exceeds its costs?
Vacasa would only say that it expects its revenue to soar. In the next year, the company believes it will generate more than $500 million in net revenue on gross bookings volume more than double that.
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