Coachmen Industries Inc. (COA), a manufacturer of recreational vehicles and system-built housing in the U.S., agreed Friday to sell its RV division in northern Indiana to rival Forest River, a unit of Warren Buffett’s Berkshire Hathaway (BRK-A) Inc.
Elkhart, Ind.-based Forest River, a major producer of RVs, cargo trailers, buses and mobile offices, will acquire most of the assets of Coachmen’s RV Business, including the co.’s brands, product lines, its central manufacturing operations in Middlebury, Ind., and a dealership in Elkhart, Ind.
Coachmen Industries CEO Richard Lavers said Forest River, one of the nation’s largest and most-profitable RV makers, will offer to keep on almost 85% of Coachmen’s RV Group employees in Indiana. 15% will lose their jobs, but some will be able to interview with Forest River or transferred to the continuing operations of Coachmen Industries.
In the third quarter alone, motorized recreational vehicle shipments plunged 63% industrywide. Coachmen’s RV business saw a 52% slump as it lost money on each vehicle it made while its housing revenue dropped 4.1%. The acquisition would result in enough liquidity for the Middlebury, Ind.-based co. to survive and expand its remaining divisions.
“With this transaction, we secure the future for this proud brand, and the employees of our RV Group. This announcement will also end the speculation over whether Coachmen itself will survive these extraordinarily difficult times, and preserve the jobs of our employee base, in both our RV and Housing segments”, said Mr. Lavers.
Shares of Coachmen Industries Inc., have nearly doubled at midday trading, adding $0.48 to $1.05 rtq, up 84.21%. The stock has been on the downhill slide for the past 5 years, with it falling from just under $20 level. Shares are down 90% this year and 50% for November alone. In the last 52 weeks shares rose to a high of $6.40.
Terms of the deal were not disclosed. This transaction is subject to shareholder approval, which the company expects to seek in December.
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