Elkhart-based Thor Industries Inc. is buying Shipshewana recreational vehicle maker K-Z Inc. for $53.4 million, Thor announced Thursday, April 17.
K-Z, founded in 1972 by Daryl Zook, makes travel trailers, fifth wheels and toy haulers under brands that include Sportsmen, Spree and Durango. The company employs 320 workers at a complex at 985 N. 900 W., consisting of 396,000 square feet of office and production space spread among six primary facilities.
The deal should not impact employment at either company because Thor plans to operate K-Z as a separate subsidiary, as it does its other subsidiaries, said Thor spokesman Jeff Tryka.
K-Z, with sales of nearly $150 million last year, is the industry's fourth-largest manufacturer, behind Thor, Forest River and Jayco. The acquisition will extend Thor's lead as the largest in the RV market, said Tom Walworth, president of Grand Rapids, Mich.-based Statistical Surveys Inc., an independent RV industry tracking firm.
Adding K-Z, Thor will have 38.7 percent of the U.S. market as of December 2013, followed by Forest River with 34.8 percent and Jayco at 12.8 percent, Walworth said. Gulfstream will move into the fourth spot vacated by K-Z.
Walworth said it makes sense for larger companies to buy smaller ones now because there is "more upside potential in this market," as industrywide sales have not yet reached their peak levels of the mid-2000s.
"The industry has more room to grow," Walworth said. "Why not buy a company and participate in their market share, as well as your own?"
Zook called Thor "an ideal partner" because the companies share a "strong commitment to product quality and excellent customer and dealer relationships."
"Becoming a part of Thor allows us to continue to operate K-Z with the core values and relationships that have made us successful since our founding," Zook said in a statement.
For the "immediate future," Zook plans to stay on and help integrate K-Z into Thor, Tryka said.
"K-Z is a strong company and we need to learn from Daryl the key aspects that have made the company so successful over the past 40 years," Tryka said.
Thor expects the purchase to increase its earnings per share. The deal closes May 1
Thor's stock was trading at $63.56 at midday, up 1.5 percent from Wednesday's closing price of $62.62.