A controlling stake in Lazydays RV SuperCenter, the largest single-location dealership in the industry, to New York-based private equity firm Bruckmann, Rosser, Sherrill & Co. (BRS), was completed last week, according to Reuters news service.
BRS paid $206 million to acquire 57% of the preferred and 87% of the closely held common stock of Lazydays, according to a Securities & Exchange Commission (SEC) document filed by Lazydays on April 27.
Lazydays founder Don Wallace continues to own 40% of the preferred and 12% of the dealership’s common stock, according to the SEC document. Wallace also continues to serve as the dealership’s CEO.
The BRS transaction was funded by the sale, in the private placement market, on Wednesday, May 12, of $152 million worth of eight-year senior notes that will pay an 11.75% annual rate of interest, Reuters reported.
The BRS transaction also allowed PPM America Inc., the U.S. private equity arm of British insurer Prudential PLC, and the Lazydays Employee Stock Ownership Plan (ESOP) to cash out of the dealership.
The $206 million price is equal to 7.5 times Lazydays’ 2003 adjusted earnings before interest, taxes, depreciation and amortization (EBTIA) of $36.7 million.
Lazydays recorded net income of $25.4 million in 2003, a sharp increase from its $3.7 million in net earnings in 2002, according to the SEC filing.
The dealership posted a net loss of $4.9 million in 2001 and a net loss of $6.1 million in 2000 when the motorhome segment of the RV industry was soft. However, Lazydays posted net earnings of $9 million in 1999.
Lazydays generated $756 million in sales revenue last year, compared with $681 million in 2002. Its annual sales from 1999 through 2001 ranged from $543 million to $562 million, according to the SEC filing.
Lazydays was founded in 1976 by Don Wallace along with his father and one of his brothers. During 1999, Wallace sold a majority interest in the dealership to the Lazydays Employees Stock Ownership Plan. The ownership of Lazydays was later restructured as a result of the investment by PPM.