  We present Herschel and XMM-Newton observations of ULASJ1234+0907
($z=2.503$), the reddest broad-line Type 1 quasar currently known with
(i-K)>7.1. Herschel observations indicate that the quasar host is a
hyperluminous infrared galaxy (HyLIRG) with a total infrared luminosity of
log10(LIR/L0)=13.90+/-0.02. A greybody fit gives a dust temperature of
Td=60+/-3K assuming an emissivity index of beta=1.5, considerably higher than
in submillimeter bright galaxies observed at similar redshifts. The star
formation rate is estimated to be >2000M0/yr even accounting for a significant
contribution from an AGN component to the total infrared luminosity or
requiring that only the far infra-red luminosity is powered by a starburst.
XMM-Newton observations constrain the hard X-ray luminosity to be
L(2-10keV)=1.3e45 erg/s putting ULASJ1234+0907 among the brightest X-ray
quasars known. Through very deep optical and near infra-red imaging of the
field at sub-arcsecond seeing, we demonstrate that despite its extreme
luminosity, it is highly unlikely that ULASJ1234+0907 is being lensed. We
measure a neutral hydrogen column density of NH=9e21/cm^2 corresponding to AV~6
mags. The observed properties of ULASJ1234+0907 - high luminosity and Eddington
ratio, broad lines, moderate column densities and significant infra-red
emission from re-processed dust - are similar to those predicted by galaxy
formation simulations for the AGN blowout phase. The high Eddington ratio
combined with the presence of significant amounts of dust in this quasar, is
expected to drive strong outflows due to the effects of radiation pressure on
dust. We conclude that ULASJ1234+0907 is a prototype galaxy caught at the peak
epoch of galaxy formation, which is transitioning from a starburst to optical
quasar via a dusty quasar phase.
