Thor Industries Buys Tiffin Group For $300M; Street Remains Bullish

Thor Industries announced the acquisition of Tiffin Motor Homes, Vanleigh RV and other associated operating entities (Tiffin Group) for $300 million. Shares of the recreational vehicle (RV) manufacturer closed 4.5% higher on Monday.

The deal was funded with a combination of existing cash and $165 million in borrowings from the company’s credit facility.

Thor (THO) said that “Tiffin Group will operate as stand-alone operating company within the THOR family of companies.” Thor’s CFO Colleen Zuhl said, “Exclusive of the effects of purchase price accounting and transaction-related costs, Tiffin will be accretive to our fiscal 2021 earnings.”

Zuhl further said, “THOR’s ability to assist the Tiffin Group in developing high quality products at competitive pricing in the market creates a great opportunity for growth in the future.” (See THO stock analysis on TipRanks)

On Dec. 8, Thor reported better-than-expected 1Q results. The company’s EPS of $2.05 spiked 122.8% from the year-ago quarter and came ahead of analysts’ estimates of $1.56 per share. Revenues jumped 17.5% to $2.54 billion jumped and beat the Street consensus of $2.37 billion.

On Dec. 17, Argus Research analyst David Coleman maintained a Buy rating and a price target of $125 (25.1% upside potential). The analyst said that the recent weakness in Thor stock indicates a “buying opportunity.” The analyst also cites the company’s upbeat 1Q results as well as industry expectations of about 19% growth in RV shipments in 2021. Coleman added that Thor “remains the best-positioned public company in the RV industry” due to its strong towable and motorized RVs.

Currently, most of the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 4 Buys and 1 Hold. The average price target stands at $117.4 and implies upside potential of about 17.5% to current levels. Shares have gained 34.5% year-to-date.

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