Monaco Coach Corp. plans to buy SMC Corp. for $36 million in cash and refinanced debt, making Monaco the No. 1 producer of Class A motorhomes.
SMC is a Nasdaq Stock Market-listed company and, technically, Monaco is making a $3.70 a share cash tender offer for all of SMC’s stock.
However, SMC Chairman Matt Perlot and CEO Curtis Lawler own a combined 70% of SMC’s shares, and they agreed to sell all of their stock at the $3.70 a share offering price. They also signed “irrevocable proxies to vote their SMC shares against any competing acquisition proposals,” according to Monaco.
SMC has about 5.7 million shares outstanding, so, at $3.70 a share, Monaco is paying $21.1 million in cash for the company.
SMC stock closed at $3 a share on Friday. As of 10:15 a.m. today (June 25), SMC stock climbed to $3.63 a share.
Additionally, Monaco will refinance “$15 million of indebtedness under SMC’s credit facility,” according to Monaco.
Meanwhile, Monaco said it “intends to maintain the existing SMC brands. SMC’s manufacturing facilities and its Electronic Design and Assembly Inc. subsidiary in Bend, Ore., will continue to operate in their present locations while SMC’s Safari manufacturing operations in Harrisburg, Ore., will be consolidated with Monaco facilities in Coburg, Ore.
“Monaco is currently evaluating SMC coach manufacturing operations in Hines, Ore. The company intends to continue operations of SMC subsidiary Composite Technologies Inc. and SMC’s fiberglass production facilities in Hines,” according to Monaco.
According to Statistical Surveys Inc. data, Monaco had a 16.7% retail market share in Class A motorhomes during the first four months of this year and SMC had a 3.9% retail market share during the same period, Monaco said. The combined 20.6% retail market share makes Monaco the No. 1 builder of Class A’s, passing Fleetwood Enterprises Inc., according to Monaco.
Monaco and SMC retailed a total of 2,151 units during the first four months of this year, according to Monaco.