Thor (THO) to Acquire Erwin Hymer Group for $2.5 Billion
In a notable development, Thor Industries, Inc. THO has agreed to buy Germany’s Erwin Hymer Group SE (“EHG”) for €2.1 billion ($2.5 billion), marking its biggest acquisition.
This cash and stock deal is likely to open up chances before the Elkhart, IN-based recreational vehicle (“RV”) manufacturer, Thor to stamp its position in the growing European RV market. On the other hand, Hymer family finds a ‘new owner partner’ in Thor Industries for Erwin Hymer Group to effectively go on with its long-term growth and internationalization strategy. Moreover, the combination of Thor and Erwin Hymer Group is likely to create the world’s largest RV manufacturer, with strong position in both North America and Europe.
The board of directors of Thor has approved the transaction and it is likely to close near the end of 2018. However, the fructification of the deal is subject to the satisfaction of certain customary and other required approvals. Following the announcement of the deal, shares of Thor have gained 5.8% in a day’s trading.
Thor anticipates the acquisition of Bad Waldsee, Germany-based EHG to likely be accretive to its earnings in the first year. EHG is a leading manufacturer of RVs in the growing European market, with a strong lineup of industry-leading vehicle brands. This deal provides an excellent opportunity for Thor to expand with this European RV market leader.
On the other hand, with Thor Industries, Erwin Hymer Group will be able to expedite the development of its relatively new activities in the promising North American market.
Over the past six months, shares of Thor have underperformed the industry it belongs to. The stock has declined 16.2%, wider than the industry’s decrease of 8.9%.
Zacks Rank & Key Picks
Thor currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF, Allison Transmission Holdings, Inc. ALSN and Oshkosh Corporation OSK. While each of Fox Factory and Allison Transmission sports a Zacks Rank #1 (Strong Buy), Oshkosh carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 16.8%. Over a year, shares of the company have soared 67.4%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past year, shares of the company have increased 47.4%.
Oshkosh has an expected long-term growth rate of 18.3%. Over the past three months, shares of the company have risen 6.5%.
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