Drew Industries Inc. announced that its wholly-owned subsidiary, Lippert Components Inc., has reached an agreement in principle to acquire certain assets and the business of Star Design LLC, an Elkhart, Ind.-based manufacturer of thermoformed sheet plastic products for the RV, bus and specialty vehicle industries.
Closing of the transaction, anticipated to take place within 30 days, is subject to completion of due diligence, agreement on final terms, the execution of definitive transaction documents and satisfaction of customary closing conditions. According to a press release, the purchase price is expected to be approximately $12 million, which would be paid at closing from available cash and borrowings under the Lippert’s $75 million line of credit.
“Star Design has an excellent management team, and a great reputation in the markets they operate,” said Drew President Scott Mereness. “And we look forward to the Star Design management, including Kevin Gipson, president of Star Design, continuing to serve existing customers after the transaction is completed. In 2013, we relocated our RV thermoforming plastic production from Texas to an Elkhart location large enough to accommodate expected growth. We have continued to grow our RV and specialty markets plastics business since then, and we are excited to boost further growth with the acquisition of Star Design.”
Lippert believes the additional product lines and diversified customer base will accelerate its expansion into specialty markets. Star Design has annual sales of approximately $10 million.
Star Design Chairman Kelly Rose, who will not remain with the business, believes he is leaving the company and operations team in good hands. “Star Design has experienced strong growth in the past few years, and we are confident Lippert Components will continue to strategically drive the business forward,” said Rose. “We also believe Lippert Components will benefit by adding our experienced team, and also provide the Star Design team with great opportunities for professional growth and advancement.”