Lazydays Being Sold to Private Equity Firm
Lazydays RV SuperCenter, the largest single-location dealership in the industry, is in the process of being sold to a New York-based private equity firm, credit rating agencies Moody’s and Standard & Poor’s reported Wednesday (April 28).
The intended buyer is Bruckmann, Rosser, Sherrill & Co. (BRS), which was founded in 1995 by former senior executives of Citicorp Venture Capital Ltd.
The woman who answers the phone at the BRS office said the company does not speak with news organizations. However, the BRS website states that it “works closely with the management team (of acquired companies) to assess and optimize the company’s business plan, arrange financing, structure acquisitions and close the transaction.
“BRS does not become involved in day-to-day operations of its portfolio companies. Instead, BRS helps ensure each company attracts and retains the best managerial talent available by implementing meaningful long-term equity incentives and performance based compensation.”
In deciding what companies to buy, BRS looks for firms that “participate in economically attractive industries with strong fundamentals.” It also seeks businesses with “a sustainable competitive advantage including an ability to innovate and withstand economic downturns” that are “led by capable and ethical management with a proven track record of achievement.”
The spokesman for Lazydays, based in Seffner, Fla., did not immediately respond to a phone call or e-mail.
BRS plans to acquire Lazydays after the completion of a $155 million debt offering by Lazydays, according to Moody’s and Standard & Poor’s. Both rating firms believe the proposed Lazydays offering is of “medium grade” with “speculative elements” but that the megadealership has the “capacity to meet its financial commitments.”
BRS plans to buy Lazydays for $206 million in a deal that would be funded by the proceeds from the $155 million debt offering plus “rollover equity and cash consideration” which would be used to refinance some of the dealership’s existing debt.
The $206 million price is equal to 7.5 times Lazydays’ 2003 adjusted earnings before interest, taxes, depreciation and amortization (EBTIA) of $36.7 million.
Lazydays generated $756 million in sales revenue last year, Standard & Poor’s reported.
“Lazydays is being acquired primarily from PPM as well as from the (Lazydays) Employee Stock Ownership Plan (ESOP) and other stockholders of the company,” Moody’s reported.
Martin King, analyst with Standard & Poor’s, said he does not know what PPM is, but he added, “I believe it’s the company that once held Lazydays’ subordinated debt. Lazydays completed a financial restructuring in 2002 and the subordinated debt was exchanged for equity in the company.”
Lazydays was founded in 1976 by Don Wallace along with his father and one of his brothers. During 1999, Wallace sold a majority interest in the dealership to the Lazydays employees’ ESOP. The Lazydays ESOP then was merged into the Alliance Holdings Inc. Employee Stock Ownership Plan. Wallace, who continued as the dealership’s CEO, said the transaction in 1999 pegged Lazydays’ value at $170 million. The dealership had a little over $500 million in sales that year, he added.