Casago, a vacation rental property management franchise company, has announced the acquisition of Vacasa, a Portland-based vacation rental management platform, for $128.6 million. This deal marks a significant reshuffle in the vacation rental industry, creating a new powerful force in the market.
Acquisition terms and Casago and Vacasa portfolios
Under the terms of the agreement, Casago will buy all outstanding shares of Vacasa held by public stockholders at a price of $5.02 per share, subject to adjustment in the merger agreement.
Founded in 2001, Casago currently manages nearly 5,000 properties in 72 cities across the United States, Mexico, Costa Rica, and the Caribbean. Vacasa, on the other hand, managed approximately 41,000 homes in the United States, Belize, Canada, Costa Rica, and Mexico earlier this year.
Merger goal: Creating an unmatched platform
The two companies stated that the merger would create an “unmatched vacation rental management platform, pairing the advantages of an international brand with the personalized care of local management.”
Steve Schwab, founder and CEO of Casago, said:
“Casago has always been committed to delivering personalized, locally-empowered service to homeowners, and exceptional experiences to guests. We’re excited to merge with Vacasa, a company that shares our dedication to excellence.”
Challenges for Vacasa and restructuring
The deal comes at the end of a challenging year for Vacasa, and four months after the firm raised $30 million in an initial senior secured convertible notes financing, with the option for an additional $45 million, to support its restructuring efforts.
The announcement coincided with the release of Vacasa’s Q2 financial results, where the company reported an 18% year-over-year drop in revenue to $249 million and net losses that more than doubled to $13 million. Additionally, quarterly gross booking value dipped 19% compared to the same quarter in 2023, due to a 17% decrease in nights sold.
The company carried out its second round of layoffs this year in May, where 800 employees – or 13% of the company’s workforce – were laid off amid a “significant restructuring” of the business. Several key executives also departed.
From public listing to private company
Vacasa went public on the Nasdaq Global Select Market in December 2021 through a merger with special purpose acquisition company (SPAC) TPG Pace Solutions, raising $340 million in gross cash proceeds and debuting with a valuation of $4.4 billion. Since then, however, its share price has plummeted.
Upon completion of the transaction, Vacasa will no longer be listed on the Nasdaq, and the combined company will become privately held.
Roofstock’s involvement and other investors
Additionally, proptech platform Roofstock will invest in and provide strategic guidance to the combined company. Existing Vacasa shareholders Silver Lake, Riverwood Capital, and Level Equity will retain minority investments in the combined company.
Outlook and timeline
The transaction is expected to close towards the end of Q1 or the beginning of Q2 2025. This merger is expected to have significant implications for the vacation rental industry, creating a new powerful player with an extensive property portfolio and a strong technological infrastructure.
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