United States securities and exchange commission logo
September 14, 2021
Matthew Roberts
Chief Executive Officer
Vacasa, Inc.
850 NW 13th Avenue
Portland, OR 97209
Re: Vacasa, Inc.
Registration
Statement on Form S-4
Filed August 12,
2021
File No. 333-258739
Dear Mr. Roberts:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
Cover Page
1. Please revise the
prospectus cover page, eighth paragraph, to disclose that you will be a
controlled company.
Q: What is an "Up-C" Structure?, page xiii
2. We note your disclosure
that the Up-C structure will provide potential future tax benefits
for Vacasa, Inc. Please
revise to add a separate question and answer discussing the Tax
Receivable Agreement
and who exactly receives the future tax benefits to include
quantification of the
allocation of future tax benefits and the potential size of any
payments under the
agreement.
Matthew Roberts
FirstName
Vacasa, Inc.LastNameMatthew Roberts
Comapany 14,
September NameVacasa,
2021 Inc.
September
Page 2 14, 2021 Page 2
FirstName LastName
Q: What are the PIPE Financing and the Forward Purchase Agreements?, page xiv
3. We note that the PIPE Investors and certain Forward Purchase investors
are investing into
the proposed business combination at a discount compared to TPG Pace
shareholders.
Please add a question and answer addressing why these investor groups
as compared to
the TPG Pace shareholders are investing at a discount and address the
potential impact of
such financings on TPG Pace shareholders such as the immediate
dilution that TPG Pace
shareholders will experience from the pricing of the PIPE Financing
and Forward
Purchase financing.
4. We note that the terms of the Forward Purchase financing were amended
to make them
more favorable for certain Forward Purchase investors. Please add a
question and answer
discussing the Forward Purchase financing amendments in greater detail
so that TPG Pace
shareholders can understand the terms of the financing and how such
terms changed from
the company's initial public offering.
Q: What equity stake will current TPG Pace shareholders and Existing VH Holders
hold in
Vacasa, Inc...., page xiv
5. Revise to offer at least one additional redemption scenario in between
those you currently
present. Also, revise to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders.
Summary of the Proxy Statement/Prospectus, page 1
6. Elaborate upon your statements throughout the prospectus to provide
insight into your
expectation that the cash consideration will be $0.00 and Existing VH
Holders are
expected to retain the entirety of their equity interests.
Interests of TPG Pace's Directors and Executive Officers in the Business
Combination, page 10
7. We note that one director recused himself from the vote in favor of
the proposed business
combination. Please revise to identify the director and briefly
discuss why he recused
himself from the vote.
What interests do the TPG Pace Insiders have in the Business Combination?, page
10
8. Quantify the "significantly higher value" of the TPG Pace Founder
Shares.
9. We note that certain TPG Pace's officers and directors own a material
interest in Sponsor.
Please revise the fourth bullet to quantify their aggregate ownership
interest.
10. We note that TPG Capital BD may be owed certain fees related to the
proposed business
combination. Please revise the sixth bullet to quantify any fees
payable to TPG Capital
BD.
11. We note that the Sponsor transferred 40,000 Class F ordinary shares to
each of the
company's independent directors. Please revise to include a separate
bullet which sets
Matthew Roberts
FirstName
Vacasa, Inc.LastNameMatthew Roberts
Comapany 14,
September NameVacasa,
2021 Inc.
September
Page 3 14, 2021 Page 3
FirstName LastName
forth the aggregate shares held by the company's independent directors
and their current
market value.
12. We note that Karl Peterson and Greg Mrva have an ownership interest in
Vacasa
Holdings. Please revise the seventh bullet to quantify the value of
such ownership
percentage based upon the value of the overall transaction.
13. Please revise the eighth bullet to quantify the current market value
of the Sponsors and its
affiliates investment in TPG Pace. Additionally, please revise to add
a new bullet to
detail, upon completion of the business combination, the Sponsors and
its affiliates
ownership of Vacasa, Inc. Please quantify their aggregate equity
position and its relative
value based upon the value of the overall transaction.
Risk Factors, page 18
14. Please highlight the risk that the Sponsor will benefit from the
completion of a business
combination and may be incentivized to complete an acquisition of a
less favorable target
company or on terms less favorable to TPG Pace shareholders rather
than liquidate.
15. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omissions in a registration
statement.
16. Please highlight the material risks to Class A shareholders as a
result of the Class G
Common Stock conversion rights. Clearly explain the steps, if any, the
company will take
to notify all shareholders, including beneficial owners, regarding
when the Class G
Common Stock becomes eligible for redemption
If we are unable to attract new vacation rental homeowners, page 20
17. We note your disclosure that you saw an increase in homeowner
terminations during 2020
due to COVID-19. Please revise to quantify the increase in
terminations due to COVID-
19 and any continuing trends.
Bookings through our distribution partners account for a significant portion of
our revenue, page
22
18. We note your disclosure that bookings through Airbnb, Booking.com and
Vrbo accounted
for the vast majority of your bookings through your distribution
partners. Please revise to
quantify the percentage of Gross Booking Value attributable to these
distribution partners
for 2020 and the most recent interim period.
The COVID-19 pandemic and the impact of actions to mitigate the COVID-19
pandemic have
materially adversely impacted, page 28
19. Please revise, to the extent possible, to quantify the negative
impacts COVID-19 has had
Matthew Roberts
FirstName
Vacasa, Inc.LastNameMatthew Roberts
Comapany 14,
September NameVacasa,
2021 Inc.
September
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on the Vacasa Holdings' business and operations. In this regard, we
note your disclosures
that you experienced a decline in revenues, an increase in
cancellations, an impact on
nights sold, a wind-down of international operations, furloughs,
layoffs, etc. Please
include enough detail so that shareholders can appreciate the
discussed risk and its impact
on your business and operations.
Our ability to use our net operating loss carryforwards..., page 63
20. Please revise to quantify the carryforwards you plan to realize into
tax savings.
Vacasa, Inc. will be required to pay the TRA Parties for certain tax benefits,
page 70
21. Please revise to quantify the potential size of any payments under the
Tax Receivable
Agreement.
The Business Combination, page 96
22. Please revise to include diagrams detailing the various transaction
steps to include the
final Up-C organizational structure. In this regard, we note that the
prospectus cover page
references such diagrams which are not included in the proxy
statement/prospectus.
Ownership of Vacasa, Inc. Following the Business Combination, page 98
23. Please disclose the Sponsor and its affiliates total potential
ownership interest in Vacasa,
Inc. assuming exercise, vesting or conversion of all securities.
24. Please revise to disclose all possible sources and extent of dilution
that TPG Pace
shareholders who elect not to redeem their shares may experience in
connection with the
proposed business combination. Provide disclosure of the impact of
each significant
source of dilution at each of the redemption levels detailed in your
sensitivity analysis,
including any needed assumptions. In this regard, we note that the
equity stake
scenarios exclude the dilutive effects of the exercise or vesting of
equity based
compensation awards and Vacasa Class G Common Stock.
Waiver Agreement, page 113
25. Please revise to discuss in greater detail what the Sponsor has waived
or forfeited in each
of the three subparagraphs. Please include enough detail so TPG Pace
shareholders can
understand what the Sponsor has been specifically waived or forfeited.
Background of the Business Combination, page 120
26. Please discuss in greater detail any negotiations related to the
Sponsor or TPG Pace
shareholders equity position in the post-combination company. In this
regard, we note
that the Sponsors agreed to waive or forfeit certain shares to offset
the PIPE Financing and
Forward Purchase financing discount. Please discuss in greater detail
the number of
shares waived or forfeited, the specific negotiations regarding this
agreement and any
Matthew Roberts
FirstName
Vacasa, Inc.LastNameMatthew Roberts
Comapany 14,
September NameVacasa,
2021 Inc.
September
Page 5 14, 2021 Page 5
FirstName LastName
other negotiations regarding the Sponsor or TPG Pace shareholders
equity position.
27. Explain the Board's consideration of the Other Potential Targets,
specifically Company A,
B and D.
28. We note that between April 23, 2021 and May 6, 2021 the parties
exchanged a number of
term sheets and proposals which culminated in an executed term sheet
on May 6, 2021.
Please revise the respective discussions to discuss the material terms
of the exchanged
term sheets, proposals or any feedback or negotiations related thereto
in greater detail
including the modification of any material terms related to price,
valuation or
consideration. In this regard, we note that the included summaries are
overly vague and
do not present a clear understanding of how the parties negotiated the
material terms of
the proposed business combination.
29. We note that on April 28, 2021 J.P. Morgan sent a revised term sheet
which revised the
terms of the Tax Receivable Agreement. To the extent applicable,
please revise to discuss
any negotiations regarding the allocation of future tax benefits
between the respective
parties.
30. We note that on July 13, 2021 the parties agreed on an updated
transaction valuation of
$3,750 million. Please revise to discuss in greater detail how this
valuation was
determined and the specific negotiations that resulting in this
agreement, considering the
valuation of $5,633 million on April 26, 2021. Additionally, we note
that this transaction
valuation does not match the transaction valuation disclosed elsewhere
in the proxy
statement/prospectus of $3,963 million.
The TPG Pace Board's Reasons for the Business Combination, page 125
31. We note that certain directors and company advisors have direct
conflicts of interest in the
proposed business combination. Please clarify how the TPG Pace Board
considered these
conflicts of interest in negotiating and recommending the proposed
business
combination.
32. Elaborate upon the factor that discusses Vacasa Holdings' Attractive
Economics,
including the high returns on investment and long-term margin
visibility.
33. Clarify what about the amount and type of consideration to be paid in
the Business
Combination the Board considered in recommending the transaction to
security holders.
Certain Financial Projections Provided to the TPG Pace Board, page 129
34. Disclose how the Q2 2021 expected results differed in the PIPE
Marketing materials, to
which you make reference on page 124.
The Domestication Merger, page 155
35. We note your disclosure in the last paragraph that U.S. Holders of TPG
Pace public
securities are urged to consult with, and rely solely upon, their tax
advisors regarding the
Matthew Roberts
FirstName
Vacasa, Inc.LastNameMatthew Roberts
Comapany 14,
September NameVacasa,
2021 Inc.
September
Page 6 14, 2021 Page 6
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potential tax consequences to them of the domestication merger. We
also note that this
section represents the opinion of Weil, Gotshal & Manages LLP. TPG
Pace shareholders
are entitled to rely on the opinion. Please revise to remove this
inappropriate limitation on
reliance. Refer to Section III.D.1 of Staff Legal Bulletin No. 19.
Please also revise the
proxy statement/prospectus throughout as applicable with respect to
this opinion. In this
regard, please remove a similar limitation on reliance on page xvi in
the answer to the
question captioned "What are the U.S. federal income tax consequences
of the Business
Combination?"
Unaudited Pro Forma Condensed Combined Financial Information of Vacasa, Inc.
Basis of Pro Forma Presentation, page 172
36. Please revise your redemption scenarios here, and elsewhere where
discussed, to include
discussion of your assumptions related to any redeemable interests in
Vacasa Holdings, as
disclosed on page 181.
Unaudited Pro Forma Condensed Combined Financial Information of Vacasa Holdings
Notes to Unaudited Pro Forma Condensed Combined Financial Information
4. Preliminary Purchase Price Allocation, page 195
37. We note that your disclosure here for the "Fair Value of issued Common
units of Vacasa
Holdings" of approximately $574 million does not appear to be
consistent with the
disclosure in the subsequent events footnote on page F-75 of the
Vacasa Holdings LLC
financial statements which states the the fair value of the common
units
was approximately $405 million. Please clarify or revise.
Information About Vacasa
Our Strategic Role in the Ecosystem as the Leading Supply-Focused Platform,
page 223
38. We note you discuss and present "market level contribution." Please
revise to define this
term within your filing. To the extent that you define "market level
contribution" as a
metric, please provide the disclosures required pursuant to SEC
release 33-10751
39. Please tell us why your graphic of "Vacasa % of listings" for airbnb
listings is presented
as of June 2020, whereas for Vrbo listings your "Vacasa % of listings"
is as of March
2021.
Management's Discussion and Analysis
Key Business Metrics and Non-GAAP Financial Measures, page 247
40. Please revise MD&A to begin with a discussion and analysis of your
results of operations
under GAAP and move the discussion of key metrics and non-GAAP
measures, if any, to
follow or support your GAAP-based discussion. The focus of your
discussions should be
on your GAAP results, rather than a focus on the changes to your
various metrics. Refer
to Item 303 of Regulation S-K.
Matthew Roberts
FirstName
Vacasa, Inc.LastNameMatthew Roberts
Comapany 14,
September NameVacasa,
2021 Inc.
September
Page 7 14, 2021 Page 7
FirstName LastName
Factors Affecting Our Performance
Seasonality, page 257
41. Please revise your discussion of the impact to your non-GAAP measure
to
include discussion of the impact to your comparable GAAP measure with
equal or greater
prominence. Refer to Item 10(e)(1)(i)(A) of Regulation S-K and
Question 102.10 of the
staff's Compliance and Disclosure Interpretations on Non-GAAP
Financial Measures
Comparison of the Years Ended December 31, 2019 and 2020
Revenue, page 264
42. Please revise your discussion to quantify the multiple factors which
resulted in a change to
your revenue from the prior year. Refer to Item 303(a) of Regulation
S-K and Section
III.B of SEC Release No. 33-8350.
Management of Vacasa, Inc. Following the Business Combination, page 282
43. We note that the company and certain stockholders will be party to a
Stockholders
Agreement which includes certain provisions regarding director
appointments. Please
revise this section to clarify if there is any arrangements or
understandings between any
director and any other person or persons pursuant to which such
director was or is to be
selected as a director or director nominee. Refer to Item 401(a) of
Regulation S-K and
Item 18(a)(7) of Form S-4.
Founder Shares, page 293
44. We note that the Sponsor and the company entered into a Waiver
Agreement which
waived and forfeited certain rights related to the Sponsor's TPG Pace
Class F and Class G
shares. Please revise this section to clarify what rights have been
waived and forfeited in
connection with this proposed business combination.
Vacasa Holdings LLC
Consolidated Statements of Operations and Comprehensive Loss, page F-38
45. Please revise to present weighted average common shares outstanding,
and basic and
diluted loss per share on the face of your Consolidated Statements of
Operations. Refer to
ASC 260-10-15-2 and ASC 260-10-45.
Note 1 - Description of Business
Revenue from Contracts with Customers
Disaggregation of Revenue, page F-50
46. Please tell us your consideration of providing further disaggregated
revenue from
contracts with customers pursuant to ASC 606-10-50-5 and 55-89 through
55-91. In this
regard, we note discussion on page 245 of differences in revenue
booked on Vacasa's
sales channel compared to the sales channels of your distribution
partners. We also note
Matthew Roberts
Vacasa, Inc.
September 14, 2021
Page 8
from your revenue footnote, you provide differing services, such as
your integrated
agency services and home care solutions which appear to have different
recognition
methods.
TurnKey Vacation Rentals, Inc
Financial Statements as of and for the Period from January 1, 2021 to March 31,
2021, page F-96
47. Please revise to mark each page of your interim financial statements
and your "Notes to
Financial Statements" as unaudited.
General
48. In an appropriate place in your prospectus, please quantify the
aggregate dollar amount
and describe the nature of what the sponsor and its affiliates have at
risk that depends on
completion of a business combination. Include the current value of
securities held, loans
extended, fees due, and out-of-pocket expenses for which the sponsor
and its affiliates are
awaiting reimbursement. Provide similar disclosure for the company s
officers and
directors, if material.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Abe Friedman at 202-551-8298 or Angela Lumley at
202-551-3398 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Donald Field at 202-551-3680 or Mara Ransom at 202-551-3264 with any
other
questions.
FirstName LastNameMatthew Roberts Sincerely,
Comapany NameVacasa, Inc.
Division of
Corporation Finance
September 14, 2021 Page 8 Office of Trade &
Services
FirstName LastName