Tourism Holdings enters RV market in US, buys JJ Motorcars’ 450-vehicle Road Bear

Dec. 3 (BusinessDesk) – Tourism Holdings has reached into the U.S. market by agreeing to acquire JJ Motorcars Inc., the recreational vehicle rental company that trades as Road Bear, for $17 million.

The deal, the first big acquisition after several years of selling assets, will add as many as 450 RVs to its fleet. Road Bear is the trading name of JJ Motorcars Inc.

The acquisition of Los Angeles-based Road Bear is “a significant milestone in THL’s change of direction over this period, in which we have transformed from a tourism business with diverse assets in attractions, coaching and rentals, to a leaner operation focused strongly on rentals,” chairman Keith Smith said in a statement.

The purchase price is made of $5 million goodwill and about $12 million for the fleet of RVs. Smith said Tourism Holdings has “a proven business model.” The target company “operates a similar model to THL’s rentals businesses in New Zealand and Australia.”

The purchase will be debt-funded and targeted to complete by Dec. 31, the company said in a statement. Road Bear will contribute US$2.1 million to the company’s EBIT over the first 12 months of ownership and about meet its cost of capital, it said.

Net profit guidance for 2011 for the company’s existing businesses is unchanged at $4.0 million. Non-deductible one time costs for the acquisition would be about $1 million in 2011, it said. Total net profit including the costs of the acquisition in 2011 is forecast at $2.5 million.

The vendors, CEO Daniel Schneider and Horst Hagner, will remain with the company as employees for an agreed period after the completion of the deal, it said.

The shares fell 2.7% to 73 cents in trading today, and have fallen 7.5% this year.

(BusinessDesk)

BUDGET 2012:
Parliament Debate Live - Video Of Budget 2011
Keith Ng Interactive Graphic: How the Budget Breaks Down
BUDGET 2012 - FULL COVERAGE: Reports / Analysis - Press Kit - Reaction (from everybody) - Previews (from everybody) - Pre-Budget Announcements

Gordon Campbell: On the Budget’s Spreadsheet Victories

It wasn’t as if expectations were sky high, exactly. Chances are, it was always more likely that we’d be seeing Bigfoot rampage through the Beehive lock-up than catch a glimpse of a credible growth agenda from this government. More >>

Sludge Budget Report - Short The Dollar! MEMO: To international bankers FROM: C.D. Sludge Please short the dollar! It'll be good for both you and us. And you know you want to. Greexit, Eurogeddon... watch out... flight to quality and all that. Follow your instincts. The NZ Debt Management Office has been so surprised at the unprecedentedly low interest rates that it can borrow at that it has already entirely pre-funded the 2013 fiscal deficit - all $8 billion of it! More >>

Pattrick Smellie Comment: Doddling along the best we can hope forCriticising Budgets for lacking vision or imagination is like shooting fish in a barrel, but even so, this year's Budget again feels like a missed opportunity. Perhaps it's the intrusion of real world needs that means the government couldn't make better political use of the $558.8 million it expects to gather in its first partial asset sale. More >>