The Jolly Mon
Join Date: Jul 2007
Elkhart, Ind.-based Forest River Inc. is acquiring most of the assets of Coachmen Industries Inc.'s RV Group, including brands, product lines and central manufacturing operations in Middlebury, Ind., along with a dealership in Elkhart.
In a statement, publicly-traded Coachmen said Forest River, a subsidiary of Berkshire Hathaway Inc., will retain the majority of the builder's work force. Coachmen's modular housing and specialty vehicle operations will not be part of the transaction.
“Forest River has agreed to offer continued employment to almost 85% of our RV Group employees in Indiana,” said CEO Rick Lavers. “Some will be able to interview with Forest River to explore career opportunities. Others will be transferred to the continuing operations of Coachmen Industries Inc.”
Lavers added, "For 44 years, Coachmen has been a leading and respected RV brand, employing thousands of dedicated and talented people in the communities where we have operated. With this transaction, we secure the future for this proud brand, and the employees of our RV Group. This announcement will also end the speculation over whether Coachmen itself will survive these extraordinarily difficult times, and preserve the jobs of our employee base, in both our RV and housing segments.”
Lavers said that the ARBOC mobility bus, introduced this year, will remain with Coachmen Industries and that the company’s headquarters will stay in the Middlebury/Elkhart area.
“We will be financially sound with sufficient cash liquidity to not just survive, but to build our profitable housing businesses and continue our diversification into the bus and specialty vehicle transportation industries,” Lavers said.
The transaction is subject to approval by Coachmen shareholders. A special shareholders meeting has been set for Nov. 25.
"There is still much to be done, but we look forward to a long and bright future for both these fine companies," concluded Lavers.
This morning’s announcement that Forest River Inc. would acquire the RV assets of Coachmen Industries Inc. was significant news for an industry mired in one of the worst downturns in recent history. But, based on the aggressive stance voiced by Forest River founder and CEO Pete Liegl last month, the move wasn’t entirely unexpected.
As a prelude to the Elkhart, Ind.-based company’s national dealer meeting Oct. 22-23 – its first in a decade – Liegl openly expressed his intention to add dealers to the company’s network while also expanding Forest River through acquisition. Liegl also emphasized the financial stability of the firm amplified by parent Berkshire Hathaway Inc. and CEO Warren Buffet. In the wake of the acquisition news, which pushed Coachmen’s battered stock up 89% for the day, Liegl spoke with RVBusiness publisher Sherman Goldenberg offering more details on the transaction.
RVBusiness: Tell us why this acquisition makes sense for Forest River.
Liegl: Well, first off, it’s a fine company. Secondly, they have very good, accomplished people. I believe there are some real synergies, and I think it will be good for Coachmen and good for us.
RVBusiness: Will Coachmen RV operate as a stand-alone company?
Liegl: No, it’s not going to operate separately. And it makes sense, having been separate companies, to eliminate a lot of duplication between the two such as the backroom functions and the accounting. Other examples are human resources and insurance. We can provide those functions for them at no additional cost or at a very marginal cost because we already have everything in place. And by having more needs for insurance, our cost per unit ought to be less, which is advantageous for both of us.
RV Business: There will also be economies with the venders then, too?
Liegl: Very definitely.
RV Business: Do you expect that Coachmen will operate as a separate division of Forest River with a general manager, much like your other divisions?
Liegl: Yes, that’s the way it’s going to operate. And, again, there are economies to be gained here. Today, they are operating as part of a public company. Being a public company is very expensive, especially with the rules, regulations and the reporting that’s required of a public company. I don’t have to worry about stockholders. Warren (Buffet) does that. I also don’t have to worry about quarterly board of directors meetings or periodic conference calls or updating the Securities and Exchange Commission. So, the compliance they need to do as a public company is now gone for them in the RV sector.
RVBusiness: Can you tell us whether Forest River will maintain the majority of Coachmen’s current brands?
Liegl: It would be pure speculation on my part, but we would probably continue with what they had already had in motion.
RVBusiness: Can we assume that Warren Buffet smiled on this decision to acquire Coachmen?
Liegl: I never talked to him about it, but I think he will approve. I guess if he doesn’t (like the idea), I’ll be looking for another job. I’ll have gotten fired again.
RVBusiness: Have you released the acquisition price yet or is that contingent on the Coachmen board of directors meeting on Tuesday, at which a vote is to be taken on the sale?
Liegl: It will be released, but right now it’s contingent upon when we close and what they have. Specifically, I mean accounts receivable, raw goods and finished goods That changes every day, and will definitely affect the price.
RV Business: Are you also acquiring real estate?
Liegl: All of it, with regard to Coachmen’s RV operations. Not only in Middlebury, but Centerville (Viking RV in Michigan), Georgia and probably the dealership up there on Cassopolis Street (in Elkhart.)
RV Business: Reports indicate that Forest River is going to retain about 85% of Coachmen’s employees. Roughly, how many workers does that amount to?
Liegl: I think that’s about 600 production workers, along with sales people and purchasing employees.
RV Business: Bottom line, do you see this as a positive step for Forest River and the U.S. recreational vehicle arena?
Liegl: There’s no question. I’m firmly committed to the viewpoint that the RV business is going to be here to stay. It’s tough right now, but by the same token, we’ve been making money every month. It’s not exactly what we want in the bottom line, but we’re in the black.
Pete (Jolly Mon)
2014 Jayco Whitehawk 24 RBS
2004 Nissan Titan LE, 4x4