The Register is reporting that a private equity firm is attempting to purchase Winnebago. The firm is "less attracted by the name Winnebago than we are by the company itself internally and its integrity to manufacturing. We feel the RV industry has been hit pretty hard with the financial crisis and is pretty stagnant." They apparently want Winnebago for its manufacturing abilities to assembly kit automobiles and light trucks from another company that the private equity firm owns that imports autos from China. Hopefully management can hold this off. It doesn't sound good for anyone that is interested in the future of Winnebago's RV business.
IMHO, Winnebago won't pull the trigger on this! There one of the most solid RV makers World Wide! They manufacture just about everything they need. They go outside of there own company to buy glass, tires etc. they just expanded back into RV Trailers and will be the leader in trailer sales in 5 to 10 years. Right now were on the upside of the worse depression the U.S. have ever experienced and Winnebago survived it! And that alone speaks for itself! Thanks for posting the article. Rooster
But just who is North Street representing??? "Our firm advises companies in Mergers & Acquisitions, Capital Raising, DIP Financing, PP&E Loans, re-capitalization and re-structuring." I think this is the big question!
Really not sure what the outcome would be.
First, and the worst, Winnebago would eventually go under.
Second, there could be built-in legalese to keep the RV portion alive.
Third, assembling chinese cars would help employment in Forrest City.
Fourth, and a really long shot, outside experts could be brought in to make Winnebago think on how to dramatically increase quality and be the number one RV manufacturer. (I own a 08 Tour and it is great) But let's face it, the industry just chugs along and only makes changes when competition forces them.
I hope you are right. While I don't own a Winnebago (opted for another Iowa brand), I love a good Iowa success story and want to see them thrive.
Without controlling interest (in terms of the percentage of outstanding shares owned), this isn't solely Winnebago management's decision to make. They have a fiduciary responsibility to act in the best interest of their shareholders, not themselves, not their customers and not their employees. When you go public, that is the bite that you take from the poisonous apple. In terms of general business operations shareholders are generally happy with a "take care of the customer, take care of the employees" approach because it should yield success which is therefore also taking care of the shareholders. In the case of a company with a hugely retracted share price, nothing is outside the realm of possibility. The equity firm is quoted in another article as saying they are attempting to do this as friendly as possible. That tells me that there is an unfriendly way to accomplish this as well, which tells me that Winnebago management has some, but limited tools in their toolbox to hold it off.
J-Rooster wrote: IMHO, Winnebago won't pull the trigger on this! There one of the most solid RV makers World Wide! They manufacture just about everything they need. They go outside of there own company to buy glass, tires etc. they just expanded back into RV Trailers and will be the leader in trailer sales in 5 to 10 years. Right now were on the upside of the worse depression the U.S. have ever experienced and Winnebago survived it! And that alone speaks for itself! Thanks for posting the article. Rooster
It is possible that they are brokering the deal ahead of having someone behind them already. They could be trying to broker a deal, connect it to their other business of importing kit vehicles from China and then take the combination deal to their outside partners and say "look, this deal is ready to go, we just need your investment and we can close it."
But just who is North Street representing??? "Our firm advises companies in Mergers & Acquisitions, Capital Raising, DIP Financing, PP&E Loans, re-capitalization and re-structuring." I think this is the big question!
two-niner wrote: ...Fourth, and a really long shot, outside experts could be brought in to make Winnebago think on how to dramatically increase quality and be the number one RV manufacturer. (I own a 08 Tour and it is great) But let's face it, the industry just chugs along and only makes changes when competition forces them.
I would actually suspect the opposite. When the buyer states that they have little interest in the company name, that means they also have no understanding of the RV customer's needs, or desires. This is purely a financial decision, which means the company will loose it soul. The people at the top must have a personal interest in the product, otherwise profit becomes the primary controlling factor, rather than innovation, and integrity.
Dave
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Winnie declined the $11.00/share offer at 11:16 AM this morning. The reasons given were that the offer was vague. Sounds like a fishing trip by North Street Capital.
Randy
Just generally
This has happened all too often. Big bucks for a company, strip out the equity, raid pensions and health care funds, and sell off the scraps, make fortunes and so forth Sometimes they continue to make money before the sell off, from the list of Customers, for a while, as they raise prices and cut services.
Hope Winnebago is into making RVs and will resist selling the lives, of its People and devoted Customers to China.
There is currently many many aquisitions, of what is left, of American enterprise including critical strategic infrastructure and banks by China under guise of whatever names.
down home wrote: Just generally
This has happened all too often. Big bucks for a company, strip out the equity, raid pensions and health care funds, and sell off the scraps, make fortunes and so forth Sometimes they continue to make money before the sell off, from the list of Customers, for a while, as they raise prices and cut services.
Hope Winnebago is into making RVs and will resist selling the lives, of its People and devoted Customers to China.
There is currently many many aquisitions, of what is left, of American enterprise including critical strategic infrastructure and banks by China under guise of whatever names.
+1, you've got it down pat. Will they (Sr. Management) be interested; interesting to find out. Their Parachute will be Golden.
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