Thor Industries to Buy Jayco

Recreational vehicle maker Thor Industries Inc. said Friday that it agreed to acquire smaller peer Jayco Corp. for roughly $576 million in cash, expanding its offerings in towable RVs.

The move comes as RV sales have surged recently, with buyers tending to opt for smaller, less expensive models. Thor said it was particularly interested in bringing Jayco products, such as travel trailers and camping trailers, into its portfolio. Jayco's Jay Flight has been the No. 1 selling travel trailer for the past 11 years, Thor said.

Jayco will operate as a subsidiary of Thor, with the existing management continuing to lead the business. Derald Bontrager, Jayco's chief executive, said one of the things the company found "most attractive" about the tie-up was Thor's decentralized business structure.

"As our decentralized structure has proven for more than 30 years, we believe the best path to success is through competition," said Peter B. Orthwein, Thor's executive chairman. "We are confident that Jayco will continue to compete effectively in the market."

Jayco generated $1.5 billion in revenue in 2015. Thor brought in $4 billion in revenue.

In June, Thor reported better-than-expected profit for its latest period, boosted by a 21% climb in recreational vehicle sales. The company said the results reflected a strong response to new products, including more moderately priced motor homes, as well as its 2015 acquisition of Postle Aluminum Co.

Thor's shares, inactive premarket, have risen 14% over the past 12 months.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

July 01, 2016 08:45 ET (12:45 GMT)

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