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Fleetwood’s $33.2M Motorized Asset Sale to AIP Final

July 18, 2009 by · 1 Comment 

American Industrial Partners Capital Fund IV LP (AIP) has completed the acquisition of the motorized recreational vehicle business of Riverside, Calif.-based Fleetwood Enterprises Inc.

Fleetwood and New York City-based AIP announced the sale late Friday (July 17).

The purchase price of $33.2 million is inclusive of certain assumed liabilities and is subject to customary post-closing adjustments, according to an AIP press release.

Concurrently, Fleetwood terminated approximately 700 employees associated with this portion of its business.

The final purchase price was well off the $53 million figure initially mentioned when the offer became public on May 15. 

Fleetwood started trying to sell its RV and manufactured housing businesses Feb. 6, before it filed for bankruptcy March 10. Fleetwood contacted or heard from more than 75 companies. Of those, 10 met with management or visited Fleetwood’s operations.

In May, Fleetwood Enterprises Inc. had $20.7 million in assets compared to at least $265.2 million worth of debts, according to financial filings the company made in bankruptcy court. Of that, at least $183 million was money owed to unsecured creditors.

What You Get for $33.2 Million

The transaction with AIP was an asset purchase and included two motorhome manufacturing facilities, two motorhome service facilities and Fleetwood’s Gold Shield supply subsidiary, all presently located in Decatur, Ind. It also includes the intellectual property for Fleetwood’s existing motorhome brands and certain machinery and equipment in Riverside.

Fleetwood RV is one of North America’s leading manufacturers of Class A and Class C motorized RVs and has established one of the industry’s broadest and most respected distribution channels and product lines. Fleetwood RV will be jointly run by Chuck Wilkinson, CEO, and John Draheim, president.

Following company meetings with all associates in Decatur, Wilkinson stated, “Our veteran work force is enthusiastic and excited to return to their jobs building the best coaches in the industry.”

Draheim added, “We are confident that the new company can capitalize on the strength of the Fleetwood RV brand and strong relationships with the distribution channel that have been developed over the past 60 years.”

“AIP builds and invests in great American headquartered businesses and we believe Fleetwood RV represents an attractive investment opportunity,” said Dino Cusumano, an AIP partner. “We are pleased to be partners with Chuck, John and all the talented associates at Fleetwood RV. We respect the long and successful history of the company and greatly value the relationships that Fleetwood RV has with its dealers, customers, suppliers and associates and look forward to continuing and improving those relationships over time.”

Cusumano added, “The company’s headquarters and manufacturing operations will be in Decatur, Ind. We would like to thank the city of Decatur and the state of Indiana for their significant support during this process.”

Fleetwood was the country’s largest manufacturer of Class A motorhomes in 2008, accounting for an 18.6% share of the market, according to Statistical Surveys Inc. (SSI). The company held a 20.4% market share the year prior.

According to the latest SSI numbers through May, Fleetwood remained No. 1 in Class A retail sales with a 19.1% market share and No. 3 in Class C sales with a an 11.4% market share.

Paul Bamatter, another AIP partner, said, “Fleetwood RV will be organized as a separate standalone company within our portfolio of companies. Fleetwood RV will have one of the best balance sheets in the industry with no-third party debt and a significant cash balance at close.”

Wilkinson said, “We look forward to partnering with the American Industrial Partners team and have charted a going forward operating agenda focused on developing new and leading products, further improving our quality and service levels and our cost position.”

Draheim noted that, “Our customers and dealers have been extremely loyal to us over the years and we expect to repay that loyalty by ensuring that they are afforded innovative products built with exceptional quality, all at affordable prices. Our near-term outlook has turned positive as our dealer inventories have bottomed and retail sales have accelerated in the past few months.”

About AIP

American Industrial Partners was founded in 1989 and is a private equity firm that makes control equity investments in mid-sized industrial companies that can benefit from the firm’s systematic approach to implementing strategic and operational improvements. It is investing its fourth fund which recently closed with $405.5 million of committed capital.

For more information, visit www.aipartners.com or American Industrial Partners can be reached at (212) 627-2360.

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