October '20

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rv-pro.com October 2020 • RV PRO • 29 in the year ending Dec. 31, 2019. The acquisition advanced LCI's diversification strategy – doubling the size of aftermarket business and giving access to $7.5 billion in addressable market in truck and towing aftermarket, according to LCI. According to a spring 2020 report from New York-based investment bank firm Jefferies, CURT has an estimated 20 to 25 percent market share of the U.S. towing market. In an investor presentation in December, LCI noted that the "robust aftermarket is estimated to be double the size of the new RV market each year with higher margins." In a late 2019 interview with RV PRO, Jason Lippert agreed with the magazine's assessment that the CURT acquisition could be substantial for LCI, "especially as it per- tains to the aftermarket. CURT represents us getting into the auto aftermarket space, a new market for us … CURT's additive sales significantly lower our RV OEM concentra- tion of the total business. We've been very vocal about our strategic, long-term plan of getting North American RV to 40 percent of total business by 2022. The CURT acquisi- tion alone puts it in that 45 percent range." LCI Increasingly Eyes Europe for Growth Opps The company's international acquisi- tions have been crucial to LCI's plan to diversify and enter new markets. LCI's international sales grew to $145.8 million in 2019, representing a 40 percent increase year-over-year. That growth continued in the first quarter of 2020. "Our international business also doubled during the first quarter compared to the prior year due to the series of acquisitions we recently completed," Jason Lippert said in prepared remarks accompanying the first-quarter results. "In January of this year, we closed on the acquisition of the Netherlands-based Polyplastic Group, a leading manufacturer of acrylic window products and a strong supplier and innovator for the European caravan industry. This latest acquisition – combined with our acquisitions of Lewmar Marine, Lavet, Femto and Ciesse in 2019 – provide us with the necessary products, brand power, innovation capabilities and leadership teams to really grow our presence in the caravan, rail and marine industries across Europe." Could the threat of expanded tariffs between the U.S. and European coun- tries stifle relationships between LCI and overseas parties in the future? Carlos Navarro, LCI's director of mergers and acquisitions, tells RV PRO, "In terms of M&A activity, it's something we analyze, but it doesn't have a high impact for us." He adds that LCI is acquiring Euro- pean companies "to sell into Europe and other countries overseas." To read Part 1 of the M&A Series, on dealership M&A activity, click on the link below: http://rvpro.ly/dhgls These pie charts provided by Lippert Components show how the company's sales are changing, with aftermarket, international and adjacent market sales increasing while RV OEM sales decreasing as a percentage of the company's overall sales.

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