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Shareholders of Coachmen Industries Inc. today (Dec. 19) voted overwhelmingly in favor of selling the RV Group to Forest River Inc. for $42 million.
More than 99% of the votes cast were in favor of the sale, according to Tom Gehl, director of investor relations, following a special shareholders meeting. The company has 15.9 million shares outstanding.
The transfer of ownership will occur next week, Gehl said.
Elkhart, Ind.-based Forest River Inc. is acquiring most of the assets of Coachmen’s RV Group, including brands, product lines and central manufacturing operations in Middlebury, Ind.
Forest River, a subsidiary of Berkshire Hathaway Inc., has agreed to retain the majority of Coachmen’s RV work force. Coachmen’s modular housing and specialty vehicle operations are not part of the transaction.
The Coachmen acquisition will operate as a separate division of Forest River with a general manager, like its other divisions.
Of the $42 million purchase price, $10 million will be put into an escrow fund to pay for warranty claims. Another $11 million will go to cover accounts payable and other outstanding debt. The sale will net Coachmen at least $21 million, which will help the company become financially sound.
Management decided to spin off the RV Group after concluding that the red ink, which had reached $121 million in pre-tax losses during the last four years, would not stop in the foreseeable future.
The sale provides Coachmen with cash and keeps the company based in Indiana. It will likely move back to its former corporate headquarters in Elkhart, at least temporarily, within 30 days of the closing, Gehl said.
Coachmen will restructure its credit facility with its lead bank after the sale is approved, the company indicated.