Tourism Holdings Ltd. (THL) shareholders will on Friday (Oct. 19) vote on a plan that will shake up the motorhome business in New Zealand.
The New Zealand Herald reported that the campervan rental company operates more than 1,500 vehicles or about 27% of the market and through the proposed $69.5 million merger with rivals United Campervans and KEA Campers will lift that stake to close to 45%.
The transaction is forecast to lift annual revenue to $241.3 million in 2014 from this year’s $200 million, with profit rising to $14.8 million from this year’s $4.5 million.
Motorhomes are the backbone of THL’s business and the deal will enable an efficient approach to fleet management, according to THL. The KEA and United businesses will be fully integrated into THL, enabling operating cost cuts through the consolidation of leases, back-office savings, better buying terms and staff reductions.
THL’s payment for KEA and United includes the refinancing of $50.9 million in debt, 12 million THL shares at 61.9 cents each and $3.2 million in cash.