Private equity firm LDC has invested in rural holiday accommodation business Forest Holidays to aide a new site roll-out.

The management team of Forest Holidays has led a buy-out of the business with help from Lloyds Development Capital (LDC).

Derbyshire-based Forest Holidays has 315 cabins set in seven Forestry Commission estates in the UK. The deal is being led by chief executive Gary Fletcher, who has developed Forest Holidays up until the transaction.

LDC’s undisclosed equity investment will allow Forest Holidays to engage in a ‘proactive’ sales and marketing programme and accelerate its cabin build strategy.

With LDC entering as an investor, existing shareholder The Camping and Caravanning Club will now fully exit its interest. The Forestry Commission is retaining a ‘significant’ shareholding.

According to a statement, all Forest Holiday cabin sties are eco and environmentally sensitive, with the majority having private outdoor hot tubs and under floor heating.

In the past two years, the business has added a reported 150 new cabins, with 76 in the Forest of Dean, 19 in North Yorkshire and 65 in Sherwood Forest.

Fletcher comments, ‘Our business has shown an encouraging resilience to the challenging economic conditions of recent years, with an increasing number of customers choosing to take UK-based short, exclusive and “away from it all” breaks.

‘LDC’s investment and support brings additional strategic input and financial backing to our business and will help us to deliver our ambitious growth plans.’

Martin Draper, LDC’s UK new business managing director, says that Forest Holidays has generated ‘considerable’ profit growth in recent years based on being a business model which maximises economies of scale and fixed overhead costs.

He adds, ‘We are partnering with a high-quality management team led by Gary Fletcher, with a huge amount of knowledge and experience in the top-end domestic short-break holiday market.’

The deal with Forest Holidays forms part of LDC’s strategy of investing in ‘leading’ mid-market businesses. It represents LDC’s fourteenth investment of 2012, having invested over £215 million of new funding, together with further capital to support nine portfolio business acquisitions.