DEFM14A: Vacasa to be Acquired by Casago Holdings for $5.30 Per Share in Going Private Transaction

Vacasa, Inc. has entered into a definitive agreement to be acquired by Casago Holdings, LLC for $5.30 per share in cash, taking the company private.

Summary

• Vacasa, Inc. has agreed to be acquired by Casago Holdings, LLC in a going private transaction.
• Under the terms of the agreement, Vacasa stockholders will receive $5.30 in cash per share.
• The merger consideration represents a premium of 35% and 69% over Vacasa's 30-day and 90-day volume weighted average price per share, respectively, as of December 27, 2024.
• Affiliates of Miramar Holdings, L.P., TRT Holdings, Inc. and Roofstock, Inc. are providing a limited guarantee and equity commitment to finance the merger.
• The Vacasa board of directors, acting on the unanimous recommendation of a special committee, has approved the merger.
• The transaction is subject to customary closing conditions, including stockholder approval, and is expected to close in the second quarter of 2025.
• Upon completion of the merger, Vacasa will become a privately held company, wholly owned by Parent.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the acquisition provides a premium to recent trading prices, it also signifies the end of Vacasa as a publicly traded company and reflects underlying business challenges.

Positives

• The merger provides Vacasa stockholders with a cash premium for their shares.
• The special committee and board of directors have determined the merger is in the best interests of Vacasa and its unaffiliated stockholders.
• Significant stockholders have agreed to support the transaction.
• The deal includes guarantees and equity commitments to ensure funding.

Negatives

• The merger will result in Vacasa becoming a private company, eliminating public trading of its stock.
• Unaffiliated stockholders will not participate in any potential future growth of the company.
• The deal is subject to closing conditions, including stockholder approval, which could delay or prevent completion.
• The company will be required to pay Parent a termination fee of $4,500,000 and reimburse Parent for up to $2,000,000 of expenses if the Merger Agreement is terminated in certain circumstances.

Risks

• The transaction is subject to regulatory approvals and other closing conditions, which could delay or prevent completion.
• There is a risk that stockholders may not approve the merger.
• The company's business may be negatively impacted by the uncertainty surrounding the merger.
• Potential litigation could arise from the merger.
• The company is evaluating an unsolicited, non-binding proposal delivered by Davidson Kempner to the Special Committee on March 23, 2025 to acquire all of the outstanding shares of the Company for $5.75 per share in cash to determine whether the March 23 DK Proposal could be a Superior Proposal.

Future Outlook

The merger is expected to close in the second quarter of 2025, subject to customary closing conditions, including stockholder approval.

Management Comments

• The Board recommends that you vote FOR the Merger Proposal and FOR the Adjournment Proposal.

Industry Context

The announcement comes amid ongoing consolidation in the vacation rental industry, as companies seek to gain scale and improve profitability.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards as Vacasa is a unique company.
• Comparisons to similar companies such as Airbnb and Booking Holdings are difficult due to different business models and reporting metrics.
• The merger consideration represents a premium over Vacasa's recent trading prices, but it is difficult to assess whether this is a fair price compared to other transactions in the industry due to the unique circumstances of the company.

Legal Proceedings

• Lawsuits arising out of the Mergers may be filed in the future.
• On March 23, 2025, Davidson Kempner sent a letter to the Special Committee alleging, among other things, that (i) the TRA Amendment is invalid and violated the terms of the Tax Receivable Agreement because, in Davidson Kempners view, the TRA Amendment, even though it fully eliminated all change of control payments owed to all TRA Parties, had amended the Tax Receivable Agreement in a manner that had a disproportionate material and adverse effect on parties to the Tax Receivable Agreement that are not rolling their Vacasa equity interests in the Mergers compared to those who are rolling their Vacasa equity interests and (ii) the Special Committee breached its applicable duties by failing to secure a universal TRA Amendment that would apply to any proposal that the Special Committee determined to be a Superior Proposal or reasonably likely to result in a Superior Proposal.
• In addition, on March 24, 2025, Eric Breon, the Chief Executive Officer of Vacasa prior to leaving the Company in 2020 and a party to the Tax Receivable Agreement, who is participating with Davidson Kempner in connection with its proposals to acquire Vacasa, sent an email to the Board making a similar claim regarding the invalidity of the TRA Amendment and alleging breach of fiduciary duties by the Board and the Special Committee.
• The Special Committee and Vacasa strongly disagree with these allegations and, if litigation is ultimately filed, intend to vigorously defend against them.

Related Party Transactions

• The Rollover Stockholders, who are affiliated with certain directors, will contribute their shares to Parent in exchange for equity interests in Parent.
• The TRA Amendment, which eliminates change of control payments to TRA Parties, some of whom are directors and officers.

Stakeholder Impact

• Stockholders will receive cash for their shares.
• Employees face uncertainty regarding their future employment with the new company.
• The impact on customers and suppliers is uncertain, but the new ownership may lead to changes in business strategy.

Next Steps

• Vacasa stockholders will vote on the merger proposal at a special meeting.
• The parties will work to satisfy the remaining closing conditions.
• If approved, the merger is expected to close in the second quarter of 2025.

Key Dates

Keywords

merger, acquisition, Vacasa, Casago, stockholders, private, transaction, agreement, shares, consideration