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AIP's acquisition of Fleetwood RV seeks to recapture company's lost glory
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On Friday July 17th, American Industrial Partners and Riverside based Fleetwood Enterprises, Inc. finalized AIP’s acquisition of Fleetwood’s RV Division for a consideration of $33.2 million. This is considerably less than the original $53 million offer, and reflects AIP's assumption of Fleetwood’s existing warranty obligations. At the same time Fleetwood terminated some 700 employees within the RV division.The US bankruptcy court recently approved $873,669 in bonuses and $571,508 in severance payments to current Fleetwood executives, the very same executives who had helped run up debts of $265.2 million. Meanwhile, workers laid-off from the idled California and Pennsylvania plants wish they had been afforded similar treatment. The late John C. Crean, who founded Fleetwood Enterprises in 1950 and created a $3 billion a year company, without the use of debt, is probably turning in his grave.
AIP, a private equity firm, has certainly made a shrewd investment picking up the Decatur, Indiana based motorhome manufacturing plants, RV service facilities and Fleetwood’s Gold Shield supply subsidiary for a song. The bid also includes the intellectual property for Fleetwood’s current RV brands and certain machinery and equipment from the Riverside plant in California.
Dino Cusumano of AIP said recently, “We look forward to continuing to manufacture Fleetwood motorhomes. Fleetwood’s dealers and customers should see no change in Fleetwood motorhomes’ commitment to high quality industry-leading product. We greatly value the relationships that Fleetwood has with its dealers, customers and suppliers and very much look forward to continuing and improving those relationships going forward.”
Fleetwood filed for Chapter 11 protection on March 10th, 2009 due, in large part, to the losses incurred by its Travel Trailer unit. Since then, it has shuttered its trailer unit and divested its military housing operations and manufactured housing unit, as well as the RV Division. Fleetwood’s motorhome brands include American, Discover, Southwind and Tioga.
The acquisition of Fleetwood RV is in line with AIP’s investment philosophy which seeks to acquire businesses with “protected competitive positions, proprietary capabilities, or leading market shares, yet have the potential for significant value enhancement.”
Related Articles: Fleetwood dumps California RV operations | Navistar acquires assets of Monaco Coach Corporation |
Other News articles: NBC’s Great American RV Wreck plumbs new depths| NBC premiers new Road Trip RV Reality TV show |
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