Key Takeaways
- • Monomoy Capital Partners, a Greenwich, Connecticut private equity firm, submitted an unsolicited proposal to acquire LCI Industries for $101 per share in cash, implying an equity value of roughly $2.5 billion.
- • LCI confirmed receipt of the proposal on Wednesday, but said its existing merger agreement with Patrick Industries remains in place and its board continues to recommend the Patrick transaction.
- • LCI's board will evaluate Monomoy's proposal in consultation with independent financial and legal advisors, and no timeline for that review was provided.
- • The Patrick-LCI merger, announced in June, is under U.S. Department of Justice review after a request for additional information issued October 9, which has delayed closing.
- • Thor Industries has publicly opposed the merger, warning that further consolidation could raise component costs, reduce competition and worsen RV affordability.
Summary
Elkhart-based LCI Industries Inc. confirmed on Wednesday that it has received an unsolicited proposal from Monomoy Capital Partners, a private equity firm headquartered in Greenwich, Connecticut, to acquire the company for $101 per share in cash. Based on the share count in LCI's most recent quarterly earnings, the offer could be valued at approximately $2.5 billion.
The proposal arrives while LCI is set to merge with Elkhart-based Patrick Industries Inc. In a news release, LCI said its existing merger agreement with Patrick remains in effect and that its board "continues to recommend in favor of the Patrick transaction." The board added that, consistent with its fiduciary duties, it will carefully evaluate Monomoy's proposal with independent financial and legal advisors. Patrick said in a statement that it is reaffirming its agreement to merge with LCI and will continue executing its strategy centered on an independent and diversified brand model in the outdoor enthusiast and housing markets.
Patrick and LCI announced the proposed merger in June. Lippert Interim CEO Johnny Sirpilla said the combined company would have more than $8 billion in revenue across the outdoor enthusiast, housing and transportation markets. Closing has been delayed. On Sept. 4 the companies voluntarily withdrew their Hart-Scott-Rodino Act premerger notification forms and refiled five days later, which started a new waiting period. On Oct. 9 each company received a request for additional information from the U.S. Department of Justice as part of its review, according to a U.S. Securities and Exchange Commission filing dated Oct. 13.
Opposition has also emerged from the industry. Earlier this month, Thor Industries Inc., an Elkhart-based recreational vehicle manufacturer, warned that further consolidation could increase component costs, reduce competition and add to affordability problems already weighing on RV sales. LCI has not provided an estimated timeline for its review of Monomoy's proposal.
The proposal arrives while LCI is set to merge with Elkhart-based Patrick Industries Inc. In a news release, LCI said its existing merger agreement with Patrick remains in effect and that its board "continues to recommend in favor of the Patrick transaction." The board added that, consistent with its fiduciary duties, it will carefully evaluate Monomoy's proposal with independent financial and legal advisors. Patrick said in a statement that it is reaffirming its agreement to merge with LCI and will continue executing its strategy centered on an independent and diversified brand model in the outdoor enthusiast and housing markets.
Patrick and LCI announced the proposed merger in June. Lippert Interim CEO Johnny Sirpilla said the combined company would have more than $8 billion in revenue across the outdoor enthusiast, housing and transportation markets. Closing has been delayed. On Sept. 4 the companies voluntarily withdrew their Hart-Scott-Rodino Act premerger notification forms and refiled five days later, which started a new waiting period. On Oct. 9 each company received a request for additional information from the U.S. Department of Justice as part of its review, according to a U.S. Securities and Exchange Commission filing dated Oct. 13.
Opposition has also emerged from the industry. Earlier this month, Thor Industries Inc., an Elkhart-based recreational vehicle manufacturer, warned that further consolidation could increase component costs, reduce competition and add to affordability problems already weighing on RV sales. LCI has not provided an estimated timeline for its review of Monomoy's proposal.
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