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Tourism Holdings forms US$94M JV with Thor Industries to connect RV market

Friday 16th February 2018

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Tourism Holdings, the world's largest recreational vehicle rental business, has formed a joint venture with Thor Industries, the world's largest manufacturer of the vehicles, to develop a single platform to connect a wide range of services in the growing market for RVs.

Auckland-based Tourism Holdings will contribute assets and cash worth an estimated US$46.9 million to the Cincinnati, Ohio-based TH2connect LLC joint venture, while Elkhart, Indiana-based Thor will contribute US$47 million in cash. The business is expected to lose money in the first two years of operation as it focuses on growing customer numbers, Tourism Holdings said in a statement filed with the NZX.

Tourism Holdings shares rose 3.2 percent to a five-week high of $5.90.

The two companies expect to leverage their relevant skills, business models and know-how to enable the joint venture to become the leading global digital platform for the RV industry, with the venture acquiring US-based travel planning and travel data company Roadtrippers, including Roadtrippers' Australasian arm; the Cosmos digital platform for RV customer relationship and fleet management, product pricing and booking and rental management; the Mighway peer-to-peer RV rental operator in New Zealand and the US; and CamperMate, the New Zealand and Australian camping app.

"The RV lifestyle is exploding in popularity both in the US and around the world," said Thor Industries president and chief executive Bob Martin. "We believe TH2's digital platform will be a game changer for a new generation of RVers. 

"TH2 brings together Thor’s experience as the world’s largest RV manufacturer and THL's expertise as the world's largest RV rental company. The result will be an industry-best collection of digital services tailored specifically for RVers, a textbook case of the whole being greater than the sum of the parts."

The companies say TH2's comprehensive platform will improve every aspect of RV ownership with capabilities that include trip planning and booking, remote systems monitoring, roadside assistance, and peer-to-peer RV and campsite rental. The system will also streamline an owner’s record keeping and enable RV dealers and manufacturers to provide such support as triggered service notifications, online vehicle manuals, and more. Manufacturers, RV dealers, and rental operators who utilize TH2’s services and products will see increased efficiencies in product pricing, service engagement, and fleet management.

Tourism Holdings will contribute its interests in Roadtrippers, Cosmos, Mighway and US$2.5 million of cash to the venture.

"THL has been focused on building and acquiring technology-based assets that enhance the customer journey for some time," Tourism Holdings chief executive Grant Webster said. "We are very pleased to see the technology assets we have created and accumulated over the last five years underpinning TH2. The growth opportunities for TH2 under this new structure are immense."

The company said the joint venture business is expected to expand its products globally over time. The venture will be led by Bob Wheeler, chief executive and president of Thor's subsidiary Airstream, with Webster as executive chairman.

The venture partners will each own half of TH2, which will start with total assets of US$94 million, including US$10 million of cash to fund the venture over the initial set up period. 

Tourism Holdings expects the venture to boost its 2018 annual earnings by $17.3 million, which includes a non-cash gain on the sale of its assets, transaction costs, and a tax expense related to the restructure of Roadtrippers. It expects to detail the trading impact from initial losses will be detailed when it releases its first-half earnings on Feb. 22.

The company said future funding requirements of the venture aren't expected to be material to its debt structure or covenants.


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