Starcraft Corp. has agreed to sell its van conversion business to Centurion Vehicles Inc. of White Pigeon, Mich., for total consideration of around $5 million.
As part of the exchange, Starcraft will get $1 million in cash and a one-year note. Centurion also will assume future warranty obligations of Starcraft’s van business and Starcraft will receive royalties under a license agreement that allows Centurion to use the Starcraft name, certain trademarks and patents.
Meanwhile, Centurion gets about $2.25 million worth of inventory, machinery and equipment from Starcraft.
Starcraft does not expect “to record a significant gain or loss from the transaction.”
Starcraft employs 110 people at its van conversion operation in Goshen, Ind., and they will be given the opportunity to retain their jobs once van conversion production shifts to the 120,000-square-foot Centurion complex in nearby White Pigeon.
Centurion will begin moving manufacturing components, inventory, parts and support services from Goshen to White Pigeon after Memorial Day Weekend, said Centurion President Bob Froschauer. Production of Starcraft van conversions is expected to begin in White Pigeon on June 11, Froschauer added.
Centurion began as a truck converter and entered the van conversion business five years ago when it bought Advantage Enterprises of Goshen, Ind., manufacturer of the Advantage, Rockwood and Cobra brands.
Shipments of converted vans plunged 56% during the first quarter of this year to 9,200 units, according to the Recreation Vehicle Industry Association (RVIA). Starcraft Chairman Kelly Rose said the decision was made to sell the van conversion business so Starcraft could look to “markets where profit margins are healthy, demand is growing and new opportunities persist.”
Froschauer added, “In today’s shrinking market with fewer and fewer van converters, it is vital to look for ways to gain efficiencies. This consolidation of Starcraft and Centurion maximizes the productive capacity of our White Pigeon facility, expands our dealer base and increases our dollar volume. We are very optimistic about our leadership position in both the truck and van conversion business.”