Tourism Holdings merges with United Campervans, KEA Campers

19 October 2012

NZX & Media Release

FOR IMMEDIATE RELEASE

Tourism Holdings (thl) New Zealand rentals business merges

with United Campervans and KEA Campers

thl shareholders have today agreed to merge its New Zealand rentals business with United Campervans and KEA Campers, creating a strong New Zealand tourism advocate with the strength to prosper despite challenging tourism market conditions.

At a special meeting of thl shareholders in Auckland this afternoon investors voted overwhelmingly in favour of the resolution to acquire United and KEA for cash and shares worth a total of $69.5 million.

Completion of the transaction is expected to occur on October 31st, 2012.

Shareholders also voted in favour of the appointment of United founder Kay Howe to the thl board.

thl chairman Keith Smith said: “I am very pleased with the outcome of today’s special shareholder meeting. thl shareholders have set their company on the road to a stronger future in these economically difficult times. Combined with KEA and United, thl will have the people, brands and financial structure to take our unforgettable New Zealand campervan holidays to the world.

We expect shareholders will share in these benefits with forecsted improvements in thl group earnings flowing through to enhanced dividends.

Meanwhile I am also delighted on behalf of thl directors to welcome Kay Howe to the thl board, initially as an executive director, and as a significant shareholder in this great company.

Kay will assist with the integration team until sometime in February – March 2013. Kay’s strong industry connections and enthusiasm will be welcomed to the board and the thl group.

thl shareholders are also fortunate to be retaining the experience of KEA Campers founder Grant Brady.”
thl Chief Executive Grant Webster said:

“The board and management and the thl, United and KEA crew understand that merger plans are nothing without excellent execution; that the successful integration of these businesses will be the ultimate determinant of the merger’s success.

We understand that customer focus and service is critical during the integration phase and beyond. We are committed to executing the integration without compromising these critical features of our business and therefore no frontline positions will be cut.

I look forward to discussing more about the brand strategy at the November Annual Meeting and beyond as we develop the positioning of each part of the business.”

END

Notes to editors:

• The merger of thl’s New Zealand rentals business, United and KEA is structured as an acquisition of United and KEA’s campervan and motorhome fleets, their forward order books and certain non-fleet assets. It lifts thl’s assets to a total of $359 million. It required the approval of a simple majority of shareholders as the value of the transaction represented more than 50% of thl’s average market capitalisation.

• thl has agreed to a total consideration of $69.5 million made up of: $7.4 million of thl shares issued at 61.9 cents (the volume weighted average price of thl’s share price over the last six months); a deferred contingent consideration of $8 million linked to the realisation prices of the vendors motorhome assets; $3.2 million cash and re-financing of the vendors’ $50.9 million of external debt.

• The merger consideration represented a 10% or $7.0 million discount to the assessed market value of Kea and United Assets.

• The merger is projected to be cash flow, earnings and dividend accretive within the first two years due to increased fleet utilisation and on-going cost synergies based on the use of thl’s marketing, sales, finance, reservations and information technology infrastructure.

• At acquisition, debt including the deferred consideration is projected to rise to $158 million, increasing thl’s gearing ratio (measured as debt to debt plus equity) from 42% at the end of June 2012 to 50% at completion at the end of October. But gearing is projected to quickly return to pre-merger levels as the company pays a circa $56 million of debt in the first 20 months of the transaction up to June 2014.

• thl United and KEA have committed to the assurances and contracts currently in place in the market. These commitments extend as far as September 2014. And to the product brands that exist today.

About thl: (www.thlonline.com)

thl is New Zealand's premier tourism company. We are listed on the NZX and are the largest provider of holiday vehicles for rent and sale in Australia and New Zealand under the Maui, Britz, Mighty, KEA Australia, Motek Vehicle Sales and (following completion of today’s merger agreement) the United Campervans and KEA Campers brands. In the USA we own and operate the Road Bear RV Rentals & Sales brand. Within New Zealand we operate Kiwi Experience and the Discover Waitomo Group which includes Waitomo Glowworm Caves, Ruakuri Cave, Aranui Cave and The Legendary Black Water Rafting Co. In 2012 thl entered in a joint venture to form RV Manufacturing Group LP, New Zealand’s largest campervan and specialist vehicle manufacturer based in Auckland and Hamilton.

http://img.scoop.co.nz/media/pdfs/1210/121019__NZX_Release___thl_special_shareholders_meeting__chairmans_ceo_address.pdf

© Scoop Media