North Street Capital, the private equity firm that offered to buy Forest City, Iowa-based Winnebago Industries Inc. last week, is less than a year old and is “not real,” according to the chief of Spyker Cars, which North Street Capital tried and failed to buy in 2011.
The Des Moines Register reported that Spyker, a boutique Dutch carmaker and former owner of Swedish automaker Saab, announced it would be sold to North Street Capital in September for $43 million, but the deal never materialized. Saab went bankrupt in December.
Emerging from this background of luxury sports cars and business deals across three continents, North Street’s managing partner, Alex Mascioli, and lawyers started writing letters to officials at Winnebago, the iconic but recession-weakened 54-year-old RV maker.
Mascioli said Wednesday (May 16) that his firm is real. It intends to buy Winnebago for $321 million in borrowed money and start building foreign cars and trucks at the RV company’s factories, he said. He says he has lined up financing and agreements with foreign manufacturers.
Winnebago is not convinced. The company said last week that it had received Mascioli’s offer of $11 per share, but the board decided “it has not received sufficient information to deem the offer as credible.” Mascioli said his lawyer wrote Monday to ask what information Winnebago needs, but he hasn’t received a response.
According to the Des Moines Register, one obstacle for Winnebago may be the failure of the Spyker deal and the hard feelings it left behind.
“North Street Capital was not real,” Spyker CEO Victor Muller told a blog called “Phoenix — A Future for Saab” in March. “This means they pretended to make a deal, but in fact they could not at all (do) that. They could not provide credible evidence of assets.”
Reached by email Monday, Muller stood by the quote. The Register asked by follow-up email if the quote should be taken as a comprehensive statement about North Street Capital and its role in the Spyker deal. Muller said yes.
“I was quoted correctly and I am of the opinion Mr. Mascioli and his fund (if it really exists) are time wasters,” Muller wrote on Monday.
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Winnebago earlier today (May 18) released a statement saying they’ve reviewed the offer with its board of directors and determined that so far there’s not sufficient information to deem the offer as credible. North Street’s managing partner Alex Mascioli says they are less attracted by the Winnebago name than they are by the company itself internally and its integrity to manufacturing.
He says it’s not a secret to anybody that Winnebago has a very strong manufacturing infrastructure and unblemished name that it’s known for in the industry, and he feels that North Street can feed off of that and help it to grow. Mascioli says the RV industry as a whole has been hit hard with the economy and it’s currently stagnant.
He says their purchase of the company could help turn that around. “As a whole we think the company is great, but we also at the same time feel that it needs a little invigoration, it needs a little of somebody to step off the ledge and kind of adapt to the current climate and try to reinvigorate it,” according to Mascioli.
According to Radio Iowa, Mascioli says their relationships with overseas automakers could end up having kits sent to Forest City for the final assembly of light and medium trucks and passenger automobiles. He says doing the final assembly would be something that would not only help the company expand and grow revenue wise, it would create a hedging market in the current economic times which he feels has created a very stagnant market for the R-V industry across the board.
Mascioli feels Winnebago’s response to the latest leaves the door open and he hopes company officials are open to hearing further details of North Street’s proposal. “We’re willing to accommodate, you know we’re not looking to be hostile here in anyway, and all we want is just a seat at the table,” Mascioli says.
North Street last September acquired the Swedish luxury car maker Spyker. Mascioli says he’s been in talks with Winnebago for about two months. Winnebago shares on the New York Stock Exchange spiked upwards at the open up from $8.51 per share at yesterday’s close to $10.02, but the stock closed at $8.66 a share.