September '20

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142 • RV PRO • September 2020 rv-pro.com YEAR T he RV industry saw some blockbuster deals in the past two years, including THOR's purchase of Germany-based Erwin Hymer Group, Winnebago's acquisition of Newmar, L Catterton's purchase of Airxcel, Lippert Components' purchase of CURT Mfg., and dealer group RV Retailer's acquisition of several independent dealerships. And yet, the total number of deals for that timeframe was actu- ally down compared to the two-year period that preceded it, according to research from Baird, an investment banking firm that tracks publicly available merger and acquisition activity in the RV market. In its report, "North America M&A Activity and the RV Market," issued in January, Baird states, "After a multi-year period of significant RV M&A activity, 2019 saw a return to levels experienced in the 2011 to 2015 timeframe." Transactions in 2018 and 2019 totaled 44. That compares with 59 for the 2016-2017 period (see Figure 1A, below left), which was well ahead of any two-year period since the Great Recession, according to Baird. From 2009 through 2019, RV-re- lated firms announced at least 182 transactions, according to Baird's tally (see Figure 1B, below right). Baird counted two OEM acqui- sitions in 2019 and three in 2018, down from eight in the 2016-2017 time period. In terms of supplier M&A activity, Baird counted 13 acquisitions in 2018, but just seven in 2019. As for RV dealer M&A activity, Baird counted 11 dealer acqui- sitions in 2018 and eight in 2019. The report says acceleration in M&A activity is being driven by growth of major retail/dealer chains, including Camping World, RV Retailer and Lazydays. COVID-19 Turns 2020 M&A Outlook Cloudy There were high expectations for the RV market in 2020 prior to the COVID-19 pandemic. Eric Stetler, a Baird investment banker, told RV PRO in mid-May, "The last few weeks have been tough, and we expect the coming months to also have their challenges, but we are hopeful as the economy re-opens. Baird continues to feel strongly about the recreational vehicle sector over the long-term as the outdoor lifestyle may be a beneficiary of what is taking place – more time with family, enjoying the outdoors, etc." M&A activity in the RV industry slowed dramatically by mid- spring. Still, there were some exceptions, including mega-deal- ership chain RV Retailer's purchase of Cousins RV in Colorado, announced May 1. The far-reaching impact of COVID-19 on the economy makes it difficult to forecast with any specificity what the rest of the year might hold for M&A activity. However, Kevin Keuper, managing director of Legacy Capital Advisors, a provider of sell-side M&A advisory services to closely held, middle-market companies, sees reason for optimism. "For the first time in recent memory, on a relative basis, RV and RV suppliers will see increased desirability in the acqui- sition market," he says. "Social distancing, the trepidation of families to fly and stay in hotel rooms, as well as the desire to stay in the U.S. could make the RV segment relatively strong in terms of M&A activity in the second half of the year." Overall RV M&A Activity Slows in 2019; Forecast Murky for 2020 By Steve Bibler Stetler Keuper Figure 1A Overall RV Market: Annual Transactions, 2009-2019 Figure 1B Overall RV Market: Cumulative Transactions, 2009-2019 # DEALS 35 30 25 20 15 10 5 0 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Baird 200 150 100 50 0 CUMULATIVE TOTAL Source: Baird YEAR '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

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