U.S. Thor Industries to buy German caravan maker Hymer

FRANKFURT (Reuters) - U.S.-based recreational vehicle maker Thor Industries THO.N has agreed to buy German family-owned caravan maker Erwin Hymer Group in a deal valuing the company at 2.1 billion euros ($2.45 billion)including debt, Thor said on Tuesday.

The deal, which was flagged by Reuters last week, will see the U.S. builder of mobile homes and caravans pay the bulk of the price in cash. It will also issue 2.3 million of its shares to the Hymer family.

Thor shares closed at $97.55 on Monday.

Thor said it expected the transaction to be accretive to earnings in the first year. Thor Chief Executive Bob Martin said the investment case was not based on cutting the workforce.

“No job cuts are planned,” he told Reuters, adding that the companies were targeting synergies by sharing their best practices in areas ranging from product design to production.

“We look at ways to grow the company and keep employees happy,” he said, saying buying Hymer was a once-in-a-lifetime opportunity despite expectations for a market correction.

The recreational vehicle industry usually thrives in times of strong growth, while plunging in downturns as consumers cut down on non-essential spending.

Hymer’s owners, who earlier this year put a stake in the company up for sale to seek funds to invest in North America and Asia, originally only planned to sell a minority share.

They later opened up to the idea of selling a controlling stake, while also exploring a possible stock market listing.

Hymer is expected to post earnings before interest, tax, depreciation and amortization (EBITDA) of more than 250 million euros this year, and roughly 300 million in its fiscal 2019, people close to the matter have said.

Thor and U.S. peer Winnebago WGO.N trade at less than 7 times their expected EBITDA, while French peer Trigano TRIA.PA trades at roughly 9 times.

Erwin Hymer Group, which traces its roots to a business founded by wheelwright and coachbuilder Alfons Hymer in southern Germany in 1923, generated revenues of more than 2.5 billion euros based on production of 62,000 vehicles in the year to August 2018. It has a 20 percent share of the European market.

German rival Knaus Tabbert canceled its stock market plans in April.

JP Morgan and Barclays advised Thor on the deal, which it will partly finance by debt. Hymer worked with Macquarie.

Reporting by Arno Schuetze; Editing by Maria Sheahan and Edmund Blair