Mercury strikes gold with Sunsail

Airbreak Leisure is paying GBP35 million ($56.4 million) for Sunsail, the world’s largest sailing holiday business in a transaction which delivers a 31 per cent IRR over nearly seven years for Mercury Private Equity (MPE).

MPE acquired Sunsail from receivership in late 1992, investing GBP3.75 million ($6 million) in the ungeared transaction. MPE managing director Ian Armitage reports that the deal took just three weeks from inception to completion.

Four years later, MPE brought in ECI Ventures, which invested approximately GBP2 million to redeem approximately GBP1 million of MPE’s preference shares and to support Sunsail’s continuing expansion. Derek Lewis, the former chairman of Granada, joined Sunsail’s board as chairman in 1997.

Under MPE’s ownership, Sunsail significantly expanded its product offering, principally through the introduction of club’ holiday programmes offering a variety of onshore leisure activities for all family members to complement the seaborne element of the package.

MPE held a 44 per cent stake in Sunsail. During the lifetime of the investment, Sunsail’s annual turnover increased from GBP16 million ($26 million) to GBP44 million ($71 million) and its PBIT from GBP80,000 ($130,000) to approximately GBP4 million ($6.5 million).