Elkhart-based Thor Industries Inc. on Friday announced a $576 million acquisition of a nearby competitor that the RV maker says will help it attract younger customers in the years to come.
Thor has acquired Middlebury-based Jayco Corp., a fellow RV maker that will become a wholly-owned Thor subsidiary. The deal closed on June 30.
Thor said the deal was attractive in part because Jayco’s products are a good complement to Thor’s current lineup. Jayco has a larger market position than Thor in folding camping trailers, and it also makes travel trailers, higher-end diesel Class A motorhomes and larger Class C motorhomes.
In 2015, about 65 percent of Jayco’s revenue came from towable RVs and 35 percent came from motorized RVs.
In particular, Thor said, Jayco’s product lineup should help the company compete for younger customers who are now entering the RV market.
“The younger consumers that will drive future growth are entering the market with purchases of more moderately priced travel trailers, which have been a focus for both Jayco and our other subsidiaries. This investment positions us well to fully meet these emerging demographic trends,” the company said on its website.
In a news release, Thor CEO Bob Martin said the deal “illustrates our confidence in the future of the RV industry as younger consumers enter and expand the market over the coming decades.”
Thor said it funded the acquisition with existing cash plus approximately $360 million in borrowings from an asset-based revolving line of credit. Thor said it plans to repay the loan within three years through internally generated cash flow.
In 2015 Thor earned $293 million in pretax income from $4.01 billion in revenue. The publicly held company has 10,450 employees at 148 facilities. It has a network of 2,100 dealers.
Jayco reported 2015 pretax income of $70 million on $1.48 billion in revenue. The company, which had been owned and operated by the Bontrager family, has 3,200 employees at 31 facilities. It has a network of 850 dealers.
Thor said Jayco will continue to conduct “business as usual” with its existing senior leadership team. It plans to run Jayco as an independent company, as it does with its other subsidiaries.