STR management company Casago acquires much larger — but struggling — Vacasa

Casago, a Phoenix-based vacation rental property management company, is acquiring Vacasa, a Portland-based competitor that has nearly eight times as many homes in its portfolio.

The deal takes Vacasa private three years after it went public through a special purpose acquisition company (SPAC) merger with TPG Pace Solutions.

At the time of that public listing in 2021, Vacasa had a valuation of $4.4 billion coming off a quarter when it reported revenue of $330 million and adjusted EBITDA of $57 million. But in subsequent years the company struggled. Revenue for the full year 2023 was down 6% from 2022. As of its most recent Q3 2024 earnings report, Vacasa reported revenue of $314 million, down 17% year over year, and adjusted EBITDA of $69 million, down from $74 million in Q3 of 2023. Vacasa had two rounds of layoffs this year as it worked to reorganize its structure. At the same time as its February layoff, chief operating officer John Banczak left the company. Banczak, an industry veteran who had co-founded Turnkey Vacation Rentals, which was acquired by Vacasa, now shows on his LinkedIn profile that he is COO at Casago as of this month.

Founded in 2001, Casago manages nearly 5,000 properties in 72 cities in the United States, Mexico, Costa Rica and the Caribbean, compared to 38,000 for Vacasa, according to its latest letter to shareholders.

Casago uses a franchise model, with local property managers in each of its markets that provide services to homeowners and guests. D. Brooke Pfautz, founder and CEO of Vintory, a marketing agency for property managers, said this is Casago's strength.

“For a long time, I've believed that the franchise model is the key to scaling a national player effectively,” he said.

“We've seen this proverbial movie before, and the heavy corporate office approach simply doesn’t work. It failed with ResortQuest, Wyndham, Vacasa, and many others. In contrast, empowering decision-making at the local level and fostering local ownership that truly owns the P&L is, in my view, the proven model for building a successful and sustainable national presence.”

Casago will acquire outstanding Vacasa shares for $5.02 per share, a premium of nearly 32% from its closing price $3.81 on Friday, its last day of trading. The companies said existing Vacasa shareholders Silver Lake, Riverwood Capital and Level Equity will continue to have minority investments in the combined company following the closing. 

In addition, Roofstock, a platform to help investors buy, sell and manage single-family rental properties, will invest in and provide strategic guidance to the combined Casago-Vacasa company.

“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,” said Steve Schwab, Casago founder and CEO. “Together, we will strengthen our ability to deliver consistent service quality on a global scale, leveraging our combined resources and expertise to better serve our homeowners, guests and partners.”

“This merger is a natural next step in Vacasa’s journey over the past year, sharpening our focus on owners, guests, and our local teams that take care of them every day. By combining with Casago, a company that shares our vision of locally-empowered, homeowner-focused property management, we’re accelerating our progress on that path,” said Vacasa CEO Rob Greyber. “We are pairing national scale with local expertise, empowering entrepreneurial teams to set a new standard in vacation rental property management.”

The transaction is expected to be completed by the end of Q1 or early Q2 2025.

Earlier this month Vacasa founder Eric Breon, who resigned as CEO in 2020, launched a new property management company, Fairly.