Winnebago Industries Inc. today (Oct. 18) reported the company has signed a letter of intent indicating its interest in acquiring SunnyBrook Manufacturing Inc., Middlebury, Ind.
Upon execution of this letter of intent, Forest City, Iowa-based Winnebago began a due diligence process that will result in a formal assessment of SunnyBrook Manufacturing and a final decision on proceeding with the acquisition, according to a news release.
This would be Winnebago’s first re-entry into towable production since it became strictly a motorized manufacturer more than 40 years ago.
The company anticipates the due diligence process to be completed such that the acquisition would be finalized by the end of the calendar year. A more thorough statement will be made at that time regarding the complete scope of this potential acquisition.
“We began our journey to access potential diversification efforts last year with the announcement on Nov. 4, 2009, that we had created a new position for strategic planning, and as part of that new assignment, Randy Potts, our senior vice president of strategic planning, was tasked with investigating potential diversification strategies,” said Winnebago Industries’ Chariman, CEO and President Bob Olsen. “This potential acquisition would mark the first action the company has taken on this front.”
Winnebago had no additional comments on the announcement.
Today’s announcement confirms comments Winnebago made last week about its interest in acquiring a towable manufacturer.
In a conference call with analysts following release of its financial results for the fourth quarter and fiscal 2010, Olson said essentially what he has said before in terms of acquisitions.
But he said it, perhaps, with a bit more immediacy this time around: That the company would consider “anything that makes sense” in terms of a growth strategy amid a relatively soft U.S. motorized market.
In fact, Olson, responding to a question about whether Winnebago had been reexamining its acquisitions strategy recently — specifically regarding towables — indicated an announcement might be forthcoming “hopefully soon” regarding an acquisition.
He declined to give details.
“We continue to look at that,” Olson said. “We’re not ready to announce anything but I can tell you we are looking at some things really seriously right now and I’m hoping within a short period of time there might be something that we can discuss.”
SunnyBrook was established in 1992 and the first trailer, a 26 FP travel trailer, rolled off the line on March 22 of that year from the company’s 14,000-square-foot plant. It was founded by Elvie Frey Sr., Tommy Thornton, Susan Kalb Yoder and David Fought.
The company expanded quickly in the 1990s and today has more than 200,000 square feet of manufacturing space.
According to the latest Statistical Surveys Inc. (SSI) report, SunnyBrook RV ranked 13th in travel trailer and fifth-wheel production, having sold 982 units for 0.9% of the market through August 2010. Its annual sales were reportedly less than $35 million in 2009.
Its Middlebury facilities include two production lines making travel trailers, fifth-wheels and toy haulers. SunnyBrook had more than 250 employees before undergoing several cutbacks in 2008.
The company is run by Frey, who is chairman and CEO. He formerly worked at Starcraft RV, before leaving there to form SunnyBrook.