New Zealand-Based THL Acquiring El Monte RV
Tourism Holdings Ltd. (THL), an RV rental firm based in Auckland, New Zealand, will pay $65.3 million for Santa Fe Springs, Calif.-based El Monte RV to expand its operations in the world’s largest recreational vehicle market.
The Otago Daily Times reported that the acquisition, for an enterprise value of $93.5 million including transaction costs, will be funded through $82.2 million of debt from its existing lenders and through the issue of 3.4 million Tourism Holdings shares. The company will also invest $6 million in North American road travel app Roadtrippers USA, which will acquire its existing Geozone travel app business, and expand its online Mighway rental platform in the U.S. in the first quarter of calendar 2017.
The purchase will increase Tourism Holdings’ reach in the U.S. as the El Monte business operates in 11 locations, and has franchise operations in 15, compared with Road Bear’s seven locations. The company expects “significant” synergies in fleet and operations will be realized over the coming three years, it said.
Tourism Holdings said the purchase of El Monte means it is well positioned as the global leader in RV rentals, as it reorientates further towards the northern hemisphere.
“We are making the right steps to be truly global in our platform,” Tourism Holdings chair Rob Campbell said. “We still see opportunities in other operating markets, such as Europe, at the right time.”
The purchase of El Monte is due to settle on Jan. 6, and Tourism Holdings said the business will post a loss during the first six months, primarily due to the low season.