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Kit Manufacturing Co. has signed a nonbinding letter of intent to sell its RV business to Scott Thorpe, currently Kit’s RV Division sales manager, the American Stock Exchange-traded company announced on Saturday (Oct. 12).
The proposed deal calls for Thorpe to pay $1.75 million in cash and to assume the debt and liabilities of Kit’s RV Division, which builds travel trailers and fifth-wheels. The debt and liabilities amount to around $5.5 million.
The transaction would be financed by Progressive Investment Group of Fountain Valley, Calif.
“The letter of intent contemplates execution of the definitive agreement by Nov. 8,” according to the statement issued by Long Beach, Calif.-based Kit.
“I am very excited to continue Kit’s tradition as America’s value leader in manufacturing RVs,” Thorpe said. “Dan Pocapalia founded Kit 58 years ago and has built a strong track record of providing dealers and consumers with innovative RV products manufactured to the highest standards. I feel privileged to be able to continue in the Kit tradition.”
Kit ranked No. 18 in retail market share during the first seven months of this year in the combined travel-trailer/fifth-wheel category, according to Statistical Surveys Inc., an independent market research firm. Kit had a 0.7% retail market share in the travel-trailer/fifth-wheel category year-to-date through July 31.
Kit’s RV manufacturing plant is in Caldwell, Idaho, and it builds the Road Ranger, Companion, Millennium and Extreme brands.
Meanwhile, Pocapalia said the sale of the RV division will allow Kit “to focus on its manufactured homes operations, which have produced positive EBITDA (earnings before interest, taxes, depreciation and amortization) for the company in each of the past six years.”