HomeToGo, the Berlin-based vacation rental marketplace, has signed a binding agreement to acquire Interhome, one of Europe’s largest holiday property providers, for approximately €160 million (£133.5 million). Interhome, part of Switzerland’s Migros Group, manages around 40,000 properties across 20 countries, making this acquisition not only significant but also strategic for HomeToGo, which has operated alongside Interhome for over ten years.
This deal is set to reshape the vacation rental sector, positioning HomeToGo as the leading platform for holiday rentals across Europe. The acquisition price is complemented by deferred payments of up to €90 million (£75 million), and the transaction will be financed through various means including €75 million (£62.5 million) from senior loans provided by UniCredit and KfW. HomeToGo will also initiate a capital increase of €85 million (£71.5 million) to support the funding.
Steffen Schneider, CFO of HomeToGo, expressed enthusiasm for the acquisition, labeling it as a "once-in-a-lifetime opportunity". This sentiment echoes across the organization as both acquisition and equity financing mark notable milestones. The capital increase involves issuing 53.125 million new shares at €1.60 each, resulting in more than a 40% increase of HomeToGo’s current issued capital, creating substantial interest among investors.
This acquisition is not merely about increasing numbers; it aligns with HomeToGo’s broader strategy to dominate the vacation rental market. By integrating Interhome’s vast portfolio, HomeToGo aims to improve its technological offerings, particularly through its AI-powered marketplace technology, which seeks to deliver personalized travel experiences to its clients.
According to HomeToGo CEO Patrick Andrae, "Using our renowned technology, we plan to... transform this already successful company... maximising returns for homeowners and enhancing the guest experience." This quote highlights the tech-driven focus of HomeToGo’s operational strategy, emphasizing its commitment to leveraging technology for business success.
The acquisition also encompasses plans to grow HomeToGo’s homeowner base and improve marketing efficiency, both of which are pivotal to enhancing the overall guest experience. The long-term goal is to drive revenue growth and establish HomeToGo as Europe's premier vacation rental platform.
Following the acquisition, Interhome's existing management team is expected to remain intact, which is key to maintaining continuity and driving the business forward. Michel Gruber, chairman of the Hotelplan Group's board, commented on the agreement, stating, "We are very pleased to have found HomeToGo as the new owner for Interhome..." This reassurance suggests confidence from both sides of the transaction as they look to capitalize on synergies.
Financially, the combination of HomeToGo and Interhome is projected to generate significant revenue. For 2024, the two companies are forecasted to achieve combined revenues exceeding €330 million, with expected adjusted EBITDA surpassing €30 million, marking substantial growth potential.
The emphasis on combining functionalities and reinforcing operational capacities points to both companies preparing for increased market competition as they restructure their capacities. Schneider indicated expectations to expand the operational margin significantly, aiming for more than 15% EBITDA margin within short-order, charting steps toward even more ambitious goals.
Beyond the financial calculations, there are optimism and expectation surrounding capital market reactions to the dynamically enlarged corporate structure. HomeToGo aims to emerge from this acquisition as not only the largest but the smartest competitor within the holiday rental market.
The logistics of this deal, including when it will take full effect, hinge on regulatory approvals and other customary acquisition conditions, which are anticipated to be cleared by the first half of 2025. This timing is particularly pertinent due to seasonality within the tourism industry, as typically, the first quarter of the year is the busiest for bookings.
With this acquisition, HomeToGo is set for substantial operational expansion—both through Interhome’s portfolio and its projected revenue growth. The integration of technological advancements promises to improve the customer experience significantly, thereby unlocking greater potential within the European vacation rental marketplace.