April '18

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78 • RV PRO • April 2018 rv-pro.com B U S I N E S S I f it seems like the pace of mergers and acquisitions in the RV industry is accelerating, you're not imagining it. During the past two years, the number of these transactions totaled at least 45, up from 27 in the previous two years and well ahead of any two-year period since the Great Recession, according to invest- ment banking firm Robert W. Baird & Co., which has tracked publicly available data. Baird says that, since 2007, RV-re- lated firms have announced at least 138 transactions. "Overall RV market M&A activity has returned to pre-recession levels with a meaningful uptick in 2016 and 2017 year-to-date," according to the Baird analysis, which was generated late in 2017 (see Figure 1A, below, and Figure 1B, on page 79). There are several reasons for this uptick. M&A activity for all U.S. busi- nesses has been steadily climbing since the low point of the Great Recession. Fueling this robust trend in particular for the RV industry have been low interest rates, challenging organic growth envi- ronment, significant capital availability and strong balance sheets, according to Eric Stetler, vice president of Baird's Global Banking Investment Group. While Baird does not assign a specific aggregate value of the M&A transactions it counted, Stetler says, "For transac- tion volume, we currently have $4 bil- lion-plus that is disclosed. Our specific knowledge of larger, non-public deals confidently gets us to $5 billion-plus. I think we can probably say at least $6 billion-plus with a straight face." Baird's analysis of M&A activity shows deal-making across major seg- ments, including: • RV Makers: Baird tracked 30 transactions during the 11-year study period, driven by players including Thor Industries, which has alone acquired five companies during this period to solidify its position as the No. 1 RV manu- facturer, and REV Group, which has acquired Lance Camper, Midwest Automotive Designs and Renegade RV in just the past two years. Meanwhile, a number of smaller acquisitions also have taken place, such as Chinook RV's acquisition of Vohne Liche Mfg. (formerly Riverside Travel Trailer) in early 2018. Baird says Across industry segments, larger players are acquiring smaller ones to enter into new markets, diversify their operations, or simply to get bigger. By Steve Bibler RV M&A Activity Soaring * As of December 2017 Source: RW Baird & Co. Figure 1A Overall RV Market: Annual Transactions 0 5 10 15 20 25 30 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Year # of Deal s 14 6 4 7 9 13 17 14 13 23 28 *

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