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Baird Likes Winnebago’s SunnyBrook Buyout

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January 3, 2011 by   2 Comments

Baird logoEditor’s Note: Robert W. Baird & Co. issued a client newsletter last week following Winnebago Industries Inc.’s announcement that it had completed the purchase of SunnyBrook Manufacturing Inc. Excerpts from the Baird newsletter follow.

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Acquires SunnyBrook RV to enter towable market. As expected, Winnebago has acquired SunnyBrook RV, a small manufacturer of towables. We expect the financial impact to be modest. We like the deal as it enables Winnebago to leverage its well-recognized brand in the faster-growing towable RV segment.

Summary

Closes towable acquisition. Winnebago, through a newly created subsidiary, Winnebago of Indiana, purchased the assets of SunnyBrook RV for $5.7 million in cash, far less than we had assumed. The transaction represents a small but important step into the towable market – a category Winnebago has ignored for years.

Small but strategic. Based on limited information, we estimate its annual revenue at approximately $20 million, which would make the towable segment perhaps under 5% of go-forward Winnebago revenue. We expect Winnebago to issue an 8-K to clarify these figures, but the impact on our estimates is likely to be modest.

SunnyBrook profile. SunnyBrook dealers sold over 1,700 towable RVs in 2009 (1.3% share), according to Statistical Surveys Inc., making it the No. 13 manufacturer of towables. SunnyBrook dealers have sold approximately 1,000 towables so far this year (0.9%), implying modest share losses.

Strategic rationale. The deal enables Winnebago to: 1) enter the faster-growing towable market; 2) establish a manufacturing footprint in the Elkhart, IN area, where most towables are made; 3) leverage the Winnebago brand in a new category; and 4) identify modest cost and distribution synergies. Winnebago has started small, which seems appropriate given its limited experience integrating acquisitions.

To subscribe to this or other Baird newsletters contact Craig R. Kennison, CFA, at ckennison@rwbaird.com or (414) 765-3870.

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Comments

2 Responses to “Baird Likes Winnebago’s SunnyBrook Buyout”

  1. Bob Taylor on January 3rd, 2011 3:07 pm

    I am hopeful that this will be positive. We need someone who is independent of the big names who can build a quality unit that competes in price and amenities and provides service to the dealers and buyers. Two quality businesses that has not been involved in the drama that has been rampant in recent weeks. The RV business needed something fresh. I hope this is a beginning.

  2. Larry Daughhetee on March 13th, 2014 6:20 pm

    Now that Winnebago has the SunnyBrook line of trailers, they might be interested to see that the photo selected for “Where’s Good Sam?” in the April 2013 issue of the Good Sam Highways magazine featured my 27′ SunnyBrook 5th wheel trailer. Take a look, it’s a great photo. The photo was taken at Organ Pipe Cactus National Monument which information was posted in the Issue 1/2014 Good Sam Highways magazine.

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!





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