Discover Le Collectionist’s DETAILED Mergers & Acquisitions (M&a) PLAYBOOK IN the Luxury Rental Market

Thibault Masson

le collectionist m&a playbook in luxury vacation rental market

At the recent Scale Show Barcelona, Rental Scale-Up (RSU) took center stage by curating and hosting the Knowledge Stage, featuring an industry-first lineup of property managers as speakers. This initiative, focusing on “Sharing Real-World Tactics for Property Managers, by Property Managers,” brought forth fresh perspectives from successful property managers operating across diverse markets. 

One standout session was “Thriving Through Acquisitions,” presented by Max Aniort, Co-founder and CEO of Le Collectionist. His session provided an inside look at Le Collectionist’s impressive growth, driven primarily by strategic acquisitions. Founded with the vision of perfecting luxury holiday experiences, Le Collectionist has evolved into a global leader in the luxury rental industry, expecting €160 million in Gross Booking Value (GBV) by 2024.

Whether you’re a short-term rental manager looking to scale your business or considering an exit strategy, the example of how Le Collectionist has wielded M&A (Mergers and Acquisitions) as a formidable growth tool offers valuable lessons on what metrics buyers prioritize and how to leverage M&A for expansion.

Le Collectionist: Background and Growth

“With Le Collectionist, my vision was to create the most beautiful holidays by perfecting the art of finding each client’s ideal home and customizing it with memorable services and experiences.”

In 2014, driven by a desire to create a unique niche in the luxury holiday home rental market, Max Aniort founded Le Collectionist. The venture began with Deauville and St. Tropez as its first destinations, aiming to fill the luxury gap in the market.

Le Collectionist quickly gained momentum. By 2017, after a successful fundraising round, the company acquired Bonder & Co, the leading luxury villa rental company in Ibiza. This acquisition was a pivotal step in Le Collectionist’s “global-but-local” strategy, focusing on regional offices while catering to a global clientele.

The growth continued, and by 2022, Le Collectionist had raised over €100 million through multiple fundraising rounds, enabling five successful acquisitions. Today, Le Collectionist is recognized as one of the top travel companies globally and a leader in the European luxury home and chalet rental market. 

Le Collectionist’s Impact and Ambitious Growth

Le Collectionist is poised to lead the luxury rental industry, with an expected €160 million GBV (Gross Booking Value) in 2024. The company’s strategic growth is evident through its multi-local coverage, aiming to deliver the best on-site experiences across destinations.

  1. International Supply: With over 3,000 properties and around 5,000 bookings in FY 2023, Le Collectionist ensures exceptional on-site experiences for its global clientele.
  2. Scaling Phase: The company is on track to achieve €500 million GBV by 2028, driven by a 42% revenue CAGR over the past four years. Profitability is anticipated by 2025, with €132 million GBV projected for 2023.
  3. Market Consolidation: Le Collectionist is well-positioned to consolidate both the European and global markets, integrating acquisitions with significant synergies.
  4. Unmatched Holiday Experience: With an international clientele, particularly from the US, and an NPS exceeding 60, Le Collectionist sets the standard for luxury holiday experiences.
  5. Iconic Brand Recognition: The company’s reputation is solidified through press accolades, awards, and inclusion in the FT120.

Strong Local Presence

Le Collectionist’s success is anchored in its strong local presence, ensuring mastery of each destination, including the Alps, Corsica, the French Riviera, Provence, Cap Ferret & Arcachon Bay, Paris, Normandy, Andalusia, Ibiza & Mallorca, Catalonia, the Amalfi Coast, Tuscany, Lake Como, Ionian Islands, Cyclades Islands, Comporta, Algarve, Morocco, the Caribbean, and St Barth.

Scalable Operating Model

Le Collectionist operates with a scalable model designed to offer the best client experience. The Paris headquarters focuses on growth and opening new destinations, while regional offices, such as those in Marseille, Bordeaux, Cap Ferret, Ibiza, Barcelona, Athens, Le Châble, Annecy, and St Barth, concentrate on delivering the best on-site experiences with local expertise and seasoned teams.

Le Collectionist M&A Strategy: Strategic Growth Through Acquisitions

Le Collectionist’s mergers and acquisitions (M&A) strategy is a meticulously planned approach aimed at consolidating its position in the luxury rental market and unlocking new growth opportunities. Here’s an in-depth look at their objectives, the rationale behind key acquisitions, and the achieved results.

Objectives of the M&A Strategy

  1. Consolidate Current Destinations
    • Asset Deals to Gain Market Shares: By acquiring established companies, Le Collectionist aims to strengthen its foothold in existing markets and enhance its portfolio of exclusive properties.
  2. Unlock Key Destinations
    • Strategic Deals to Launch Local Offices and Generate Growth: Targeting strategic locations allows the company to establish a local presence and stimulate market growth through dedicated regional offices.
  3. Create Additional Value
    • New Business Deals to Serve Core Business: Expanding into complementary sectors such as property management and travel agency services creates additional value for both property owners and guests.

Rationale Behind Le Collectionist’s Acquisition Thus Far

Each acquisition undertaken by Le Collectionist serves a strategic purpose, aligning with the company’s overall growth objectives. Here’s a deeper dive into the rationale and outcomes of their key acquisitions:

Bonder & Co (Spain)

  • Objective: Gain significant market shares and consolidate Le Collectionist’s position in Spain.
  • Rationale: Bonder and Co was a leading luxury villa rental company in Ibiza. By acquiring this company, Le Collectionist not only gained access to exclusive off-market villas but also established a new office in a prime location.
  • KPIs: This acquisition contributed to achieving €3 million in GBV (Gross Booking Value), reinforcing Le Collectionist’s footprint in the Spanish market.

Bramble Ski (Switzerland)

  • Objective: Develop ski destinations and increase exclusivity offers while mitigating the seasonal nature of the business.
  • Rationale: Bramble Ski’s acquisition allowed Le Collectionist to tap into the lucrative ski tourism market. By increasing the number of exclusive offers, the company could attract a high-end clientele year-round, balancing the seasonality of its existing properties.
  • KPIs: The deal resulted in €24.2 million GBV, managing 142 houses, and achieving a Net Promoter Score (NPS) of 78.

Vallat (France)

  • Objective: Consolidate Le Collectionist’s position in the French Alps.
  • Rationale: Vallat’s acquisition solidified Le Collectionist’s dominance in one of the world’s most sought-after skiing destinations. This move bolstered their winter offerings and provided a base for further expansion in the region.
  • KPIs: The acquisition contributed €3.9 million GBV and included 90 houses, with an NPS of 89.

The Greek Villas (Greece)

  • Objective: Gain significant market shares and consolidate the company’s position in Greece, including Paros, Antiparos, Sifnos, and other key locations.
  • Rationale: By integrating The Greek Villas into its portfolio, Le Collectionist significantly enhanced its presence in popular Greek destinations. This acquisition added depth to its inventory, meeting the growing demand for luxury accommodations in the region.
  • KPIs: This strategic purchase resulted in €7 million GBV and incorporated 400 houses into the portfolio.

Ibiza Evolution Services (Spain)

  • Objective: Develop property management capabilities and leverage these to negotiate exclusivities, enhancing owner NPS and guest experience.
  • Rationale: The inclusion of Ibiza Evolution Services was aimed at bolstering Le Collectionist’s property management services. By improving these services, the company could offer better experiences to both property owners and guests, using them to negotiate more exclusive listings.
  • KPIs: This acquisition allowed for the management of 20 houses and generated €0.7 million in commissions.

Results So Far

Le Collectionist’s strategic acquisitions have not only expanded its footprint but also driven substantial revenue growth and enhanced customer satisfaction across various markets:

  • Spain: Achieved a remarkable 68% revenue growth.
  • Swiss Alps: Recorded a 13% revenue growth, with a 14-point increase in NPS and enhanced asset valuation.
  • French Alps: Saw a 56% revenue growth, added 250 properties, and strengthened its regional presence.
  • Property Management in Spain: Achieved a 15% revenue growth, a 50% increase in supply, and an exceptional owner NPS of 100.
  • Greece: Realized a 190% revenue growth, establishing a leadership position in Paros and Antiparos.

Le Collectionist’s M&A Strategy: Methodology

By strategically selecting acquisition targets and following a structured process, Le Collectionist ensures that each deal aligns with its overarching business goals. Here’s a detailed look at their M&A process, deal types, candidate criteria, and the steps involved.

Types of Deals

Le Collectionist pursues two primary types of acquisitions:

Strategic Deals: These involve acquiring direct competitors within existing markets. The goal is to integrate profitable standalone entities that boast a renowned yet complementary brand image, operational excellence, and a great cultural fit. These acquisitions help eliminate competition, expand market presence, and enhance service offerings.

Asset Deals: These focus on acquiring portfolios of exclusive properties or valuable relationships. The target is usually a strong local brand with expertise that complements Le Collectionist’s operations. Such deals are aimed at enhancing Le Collectionist’s portfolio and operational capabilities without fully integrating a company’s existing structure.

Key Performance Indicators (KPIs) for Decision Making

In evaluating potential acquisitions, Le Collectionist uses several KPIs to ensure strategic alignment and value creation:

Strategy: This KPI assesses how well a potential acquisition aligns with Le Collectionist’s brand, whether it introduces the company to new destinations or activities, and the exclusivity rate of properties. Alignment with Le Collectionist’s brand ensures there is no discord in guest experiences, which is crucial for maintaining high standards and building the brand.

Rule of 40: 

  • EBITDA Margin: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s a measure of a company’s overall financial performance and profitability, excluding certain non-operational expenses. The EBITDA margin is calculated as EBITDA divided by total revenue, expressed as a percentage. It gives insight into the company’s operational efficiency and profitability.
  • Growth Rate: This refers to the rate at which the company’s revenue is increasing over a specific period, usually expressed as a percentage. It indicates how quickly the company is expanding its sales and market presence.

The Rule of 40 combines these two metrics to ensure a balanced assessment of an acquisition target. The formula is simple: EBITDA Margin + Growth Rate = 40. For example, if a company has an EBITDA margin of 25% and a growth rate of 15%, it meets the Rule of 40.

This balance is crucial because it ensures that an acquisition contributes both to profitability and to growth. Focusing solely on profitability might mean the company is not expanding fast enough, while focusing only on growth might lead to operational inefficiencies and lower profit margins. By using the Rule of 40, Le Collectionist ensures that acquisitions are financially healthy and support sustainable long-term growth.

Valuation: Ensuring Financial Viability and Strategic Alignment

This process involves a comprehensive assessment of the financial worth of the acquisition opportunity. Here are the key components considered in the valuation:

  • Value of the Acquisition Opportunity: This refers to the overall financial value of the company or asset being acquired. It includes analyzing financial statements, revenue streams, and potential future earnings to determine what the acquisition is worth.
  • Entrepreneurial Weight: This aspect considers the intangible value brought by the entrepreneurial spirit, innovation, and leadership of the target company. It’s about assessing the potential for continued growth and success under the current leadership or integrating their innovative practices into Le Collectionist.
  • Seller’s Expectations: Understanding what the seller expects to receive from the transaction is crucial. This includes the price they hope to achieve, any conditions they may have, and their overall willingness to sell. Aligning the valuation with the seller’s expectations can facilitate smoother negotiations and a more successful acquisition process.

Accurate valuation is essential to ensure that the acquisition is financially viable and aligned with Le Collectionist’s long-term strategic goals. It helps avoid overpaying for an asset, ensures a fair deal for both parties, and supports the company’s broader growth strategy by making sound financial decisions.

Post-Merger Integration (PMI): This KPI evaluates cultural fit, operational synergies, technological integration, and legal considerations. Effective PMI is critical to ensure a smooth transition and to maximize the value derived from the acquisition.

Detailed M&A Process

1. Market Screening

Objective: Identify potential markets and opportunities.

This involves researching regions with high growth potential, driven by factors such as increasing tourism, economic stability, and demand for luxury rentals. Attractive properties are those that offer unique experiences, prime locations, and potential for high returns.

2. Opportunity Identification

Objective: Select viable acquisition targets.

Using the criteria and KPIs, Le Collectionist shortlists potential candidates that align with its strategic goals. This phase includes assessing the financial health, market position, and growth potential of each candidate.

3. Discussion with Candidates

Objective: Engage in preliminary negotiations.

Initiating conversations with shortlisted candidates to explore mutual interests and the feasibility of the acquisition. This involves discussing terms, evaluating cultural fit, and assessing initial synergies.

4. Data Collection & Analysis

Objective: Conduct thorough due diligence.

Gathering detailed financial, operational, and market data to assess the viability and strategic fit of the acquisition target. This step is critical to identify potential risks and validate the benefits of the acquisition.

5. Signing of LOI and Due Diligence

Objective: Formalize the acquisition intent.

Signing a Letter of Intent (LOI) to outline the terms of the deal and conducting an in-depth due diligence process to verify all information provided by the target company.

6. Synergy Analysis

Objective: Evaluate potential efficiencies and value creation.

Analyzing how the acquisition will integrate with existing operations and identifying areas for synergy, such as cost savings, revenue enhancement, or operational improvements. This step ensures that the acquisition adds tangible value to Le Collectionist.

7. Governance Projection

Objective: Plan organizational integration.

Developing a governance structure that integrates the new acquisition into Le Collectionist’s existing framework while maintaining operational efficiency. This includes defining roles, responsibilities, and reporting lines.

8. 1-5 Years Vision

Objective: Set long-term strategic goals.

Defining a vision for the next 1-5 years, outlining the expected growth trajectory and strategic milestones post-acquisition. This vision helps align the newly acquired entity with Le Collectionist’s overall strategic direction.

9. Integration Roadmap & Milestones

Objective: Define the integration plan.

Creating a detailed roadmap with clear milestones and timelines for integrating the acquisition into Le Collectionist’s operations. This plan ensures that all aspects of the integration are systematically addressed.

10. Execution Monitoring

Objective: Oversee the integration process.

Monitoring the integration activities closely to ensure adherence to budget, milestones, and synergy activation plans. This involves regular progress reviews and adjustments as needed.

11. Integration Activities Support

Objective: Facilitate smooth transitions.

Providing support for integration activities such as staff training, system updates, and process alignment. This support is crucial to minimize disruptions and ensure a seamless transition.

12. Progress Consolidation

Objective: Review and consolidate progress.

Regularly reviewing the integration progress, making necessary adjustments to ensure the acquisition meets strategic objectives and delivers the expected value. This final step ensures that the acquisition is fully integrated and operational.

Financing Research

Objective: Secure appropriate funding.

Throughout the M&A process, continuously exploring financing options such as cash, debt, and fundraising to support the acquisition strategy. Effective financing ensures that acquisitions are sustainable and aligned with Le Collectionist’s financial goals.

Conclusion

Le Collectionist’s M&A strategy, as outlined by Max Aniort, provides a robust framework for short-term rental managers aiming to scale their businesses. By understanding the detailed steps and strategic considerations involved, managers can better navigate the complexities of M&A, whether they are looking to expand their portfolios or position their businesses for sale. This comprehensive approach ensures that every acquisition aligns with strategic objectives, maximizes value, and seamlessly integrates into existing operations, setting a benchmark for success in the luxury rental industry.

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