Freedonia Analyst Weighs in on Thor Industries Acquisition of Erwin Hymer Group

RV industry has shown very strong growth in recent years

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Sep 19, 2018, 12:57 ET

CLEVELAND, Sept. 19, 2018 /PRNewswire/ -- Thor Industries, the largest manufacturer of recreational vehicles in the US, announced an agreement to acquire Erwin Hymer Group, a leading manufacturer of recreational vehicles in Europe, for roughly €1.7 billion ($1.9 billion) in cash and 2.3 million of Thor's shares and the assumption of debt.

Thor is a major player in the United States RV industry, with US sales of over $6.6 billion in the 2017 fiscal year (ending 7/31/2017). Thor manufactures offers a broad line of recreational vehicles through a number of subsidiaries, including Airstream, Jayco, Keystone RV, and Thor Motor Coach.

Erwin Hymer is a German manufacturer of recreational vehicles and serves the US market through its Erwin Hymer Group North America subsidiary, located in Ontario, Canada. This subsidiary mainly produces class B motorhomes, but unveiled a line of travel trailers in March 2018.

The acquisition is expected to increase Thor's dominance of the RV industry to another continent. According to the press release from Thor, "The combination creates the world's largest RV manufacturer, with the leading position in both North America and Europe, and establishes a global sales and production footprint for the Company."

According to Freedonia Group Analyst Dan Debelius, "The RV industry has shown very strong growth in recent years, with 2017 sales at 4.5 times the industry's lowest point in 2009. While there is concern about the effects tariffs will have on the industry, RVIA data shows that 2018 shipments through July are currently outpacing 2017 shipments."

Debelius continues: "As the market has continued to grow, so has Thor. Thor continues to lead the pack in US as the company grows both organically and via acquisition. For instance, in 2016 the company acquired Jayco, which was also a top RV manufacturer in the US at the time. Furthermore, Thor is expanding manufacturing operations via a number of construction projects to help relieve its large backlog as sales have continued to surge. For example, in August the company began construction on a new 750,000-square-foot facility for its iconic Airstream trailers."

Read Mr. Debelius' related blog posting Tariff Tracker: RV Industry Faces a Steel and Aluminum Fork in the Road for more insight.

Additional analysis can be found in the Freedonia report: Recreational Vehicles in the US.

https://www.freedoniagroup.com/industry-study/recreational-vehicles-in-the-us-by-product-6th-edition-3624.htm

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SOURCE The Freedonia Group