Monaco seeks help from advisers
The RV and trailer maker hires investment banking firms to help it explore “strategic alternatives” as it faces a stock buy
By Tim Christie, The Register-Guard, Published: Jan 6, 2009 08:12AM
http://www.registerguard.com/csp/cms/sites/web/business/5269021-41/story.csp
COBURG — Facing a hedge fund that now controls a big piece of the company, Monaco Coach Corp. said Monday that it has hired an investment banker to help it explore “strategic alternatives,” including joint ventures or mergers, in an effort to improve its liquidity and maintain a strong balance sheet.
The decision to hire Imperial Capital LLC comes after an Oklahoma hedge fund recently more than doubled its ownership of Monaco stock. After a series of stock buys in December and last Friday, Prescott Group Capital Management now controls 15.3 percent of the publicly traded recreational vehicle manufacturer. Prescott has not commented publicly on its intentions.
Monaco executives are “acting as if they’re concerned about an unfriendly takeover or a takeover at an unreasonable valuation,” said analyst Frank Magdlen, director of research at The Robins Group in Portland. Magdlen follows Monaco but does not own its stock.
Monaco also said it has hired Avondale Partners to evaluate strategic alternatives for its resorts division and BMO Capital Markets to look at its Bison Manufacturing horse trailer division and its Roadmaster specialty trailer division.
“Monaco will continue to execute its business plan while maintaining its tradition as a leading national manufacturer of recreational vehicles,” CEO Kay Toolson said in a statement. “We are confident that our retention of Imperial Capital will help us capitalize on our competitive position and the strength of our brands in order to maximize long-term value.”
Monaco officials did not return calls seeking comment Monday.
Monaco makes motor coaches under the Monaco, Beaver, Holiday Rambler, McKenzie and Safari brands. It also makes R-Vision, Bison and Roadmaster brand trailers and operates motor home resorts in California, Nevada, Florida and Michigan.
Monaco stock closed Monday at 68 cents per share, up 8 cents. During the past year, the stock has ranged in price from 39 cents to $12.22 per share.
Workers at Monaco’s Coburg factory have been on extended holiday furlough. The plant is scheduled to resume operations Jan. 12. The company has about 1,800 employees.
On its Web page, Imperial Capital LLC describes itself as full-service investment banking firm offering a wide range of services to institutional investors and middle market companies “including debt and equity financing … mergers and acquisitions advisory, financial restructuring and recapitalization advisory, and valuation, fairness and solvency opinions. We specialize in raising capital in challenging situations that require a creative marketing and structuring approach, particularly for middle market companies.”
Market conditions have left Monaco and other RV makers mired in a prolonged slump.
Through September, nationwide RV shipments were down 24.6 percent from 2007, according to the Recreational Vehicle Industry Association.
The industry group predicts that 2009 shipments will be 25 percent lower than 2008.
In the past 12 months, 45 of approximately 2,850 RV dealerships around the country have closed, according to the Recreation Vehicle Dealers Association.