US recreational vehicle maker Winnebago to buy Grand Design for $500 mn
04 October 2016
US recreational vehicle maker Winnebago Industries Inc yesterday struck a deal to buy privately held start-up Grand Design Recreational Vehicle Co, in a $500-million cash-and-stock deal.
Winnebago has offered to pay $395 million in cash and issue $105 million in new shares to Grand Design shareholders.
Post closing, Grand Design shareholders would own about 14.5 per cent of Winnebago.
The combined company will have revenues of around $1.4 billion and generate synergies of $7 million over three years.
Founded in 2012 by recreational vehicle (RV) specialists Don Clark, Ron Fenech and Bill Fenech, Grand Design, owned by private equity firm Summit Partners, is a manufacturer of towable RVs.
Since its founding, Grand Design has sold 25,000 RVs and has sold over 21,000 RVs at retail.
Grand Design manufactures the market leading Reflection fifth wheel and travel trailer, flagship Solitude extended stay fifth wheel, luxury Momentum toy hauler and lightweight Imagine travel trailer product lines.
The Indiana-based company generated $428 million in revenue over the last twelve months ending August 2016.
New York and Chicago Stock Exchanges-listed Winnebago is a leading US manufacturer of recreation vehicles, which are used primarily in leisure travel and outdoor recreation activities.
The Iowa-based company builds motorhomes, travel trailers and fifth wheel products.
Winnebago has a market cap of $634 million and annual revenues of $977 million.
"The addition of Grand Design will accelerate our expansion in the towables business, creating a broader and more balanced portfolio well-positioned to capitalize on the opportunities across the RV market and to drive improved profitability and long-term value for stakeholders," said Michael Happe, Winnebago's president and CEO.
Don Clark, Co-founder and CEO of Grand Design, said, "We have incredible respect for Winnebago and are honored to join an iconic company that shares our dealer-centric, customer-focused culture."