Blog Coverage Winnebago Shares Soar on Grand Design Acquisition and Preliminary Earnings Results
LONDON, UK / ACCESSWIRE / October 4, 2016 / Active Wall St. blog coverage looks at the headline from Winnebago Industries, Inc. (NYSE: WGO) as the company announced on October 03rd, 2016, that it will acquire Grand Design Recreational Vehicle Co., a manufacturer of towable recreation vehicles (RVs), in a cash and newly issued Winnebago's stock deal valued at $500 million. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
Today, AWS is promoting its blog coverage on WGO. Get all of our free blog coverage and more by clicking on the link below: http://www.activewallst.com/registration-3/?symbol=WGO.
About Grand Design
Grand Design was founded in 2012 by Don Clark, Ron Fenech, and Bill Fenech, former executives of RV maker Thor Industries Inc. Grand Design is a fast-growing manufacturer in the towable segment with rapidly expanding market share. The Company generated $428 million in revenue over the last twelve months ending August 2016, representing a compound annual growth rate of over 80% since 2013, and a top tier EBITDA margin of 14%. Grand Design is a portfolio company of global growth equity investor Summit Partners which made its investment in 2014. The company accounts for approximately 9.1% of the towable fifth-wheel market share.
"Grand Design has built a tremendous reputation and position in our industry by delivering quality products and high levels of customer satisfaction, and we are excited to welcome them to the Winnebago family," said Michael Happe, Winnebago's President and Chief Executive Officer.
Don Clark, Co-Founder and CEO of Grand Design, commented:
"This is an exciting day for Grand Design and reflects the hard work and dedication of everyone involved in our rapid growth and success over the past several years."
The Finer Details
The $500 million deal, which is the biggest acquisition in Winnebago's history, includes tax assets valued at over $75 million. After adjusting for the value of the tax assets, the purchase price implies a multiple of 7.1x Grand Design's last twelve months EBITDA of $60 million. Forest City, Iowa-based Winnebago expects to fund the transaction through a combination of $395 million in cash and $105 million in newly issued Winnebago's shares. The $500 million transaction can be considered a large purchase for Winnebago, which had a market cap of about $779.18 million at the close of trading on October 03rd, 2016.
J.P. Morgan has agreed to provide committed financing for the transaction. Upon closing, Winnebago expects to have a debt to EBITDA ratio of approximately 2.5x, inclusive of anticipated annual run rate synergies.
The acquisition is expected to be immediately accretive to Winnebago's growth profile, profit margins, and earnings per share (EPS), excluding transaction costs and before giving effect to anticipated synergies. The transaction is expected to close by the end of Winnebago's first fiscal quarter of 2017, subject to regulatory approvals and other customary closing conditions.
The combined company will have approximately $1.4 billion in pro-forma revenue along with a broader and more balanced portfolio well-positioned to deliver growth, improved profitability and value. Winnebago said that following the transaction, Grand Design's shareholders would own about 14.5% of Winnebago's shares outstanding. Don Clark will continue to lead the Grand Design towable business post-closing as its President; he will also serve as a Vice President for Winnebago and be a member of the Executive Leadership Team. Grand Design will operate as a distinct business unit within Winnebago with headquarters remaining in Middlebury, Indiana, and its portfolio of brands will remain in place.
Preliminary Fourth-Quarter Fiscal 2016 Results
Alongside the deal, Winnebago also announced preliminary results for the fourth quarter of Fiscal 2016. Revenues for Q4 FY16 are expected to be approximately $263.3 million, an increase of 4.9%, compared to $251.0 million for Q4 FY15. Diluted EPS for Q4 FY16 is expected to be approximately $0.49, an increase of 14% compared to $0.43 in the prior year's quarter. The company will release its full earning results on October 13th, 2016.
Stock Performance
Following the announcement of the deal and preliminary results, Winnebago Industries' stock soared 23.67% from its previous closing price of $23.57, closing Monday's session at $29.15. During the trading session Winnebago shares rocketed as much as 29.8%. A total volume of 4.63 million shares exchanged hands, which was higher than the 3 months average volume of 196.99 thousand shares. The stock has advanced 29.94% and 35.64% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have surged 48.66%. The company's shares are trading a PE ratio of 17.88 and have a dividend yield of 1.37%.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: info@activewallst.com
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active Wall Street
