I AM 100% IN CHARGE
As reported by The Wall Street Journal, the RV retailer didn’t specify which stock exchange it would list its shares on, but said they would trade under the symbol CWH.
Camping World, one of the larger nonpublic U.S. companies by revenue, has reported strong revenue growth for several years and remained solidly profitable. The company logged $3.33 billion in revenue in 2015, up 25% from a year earlier, according to its filing with the Securities and Exchange Commission (SEC). Camping World recorded a 43% rise in profit to $178.5 million in the year.
The company said in a filing it has about 3.1 million active customers to whom it provides a “full spectrum” of products, services and protection plans. Camping World estimates 9 million households in the U.S. own an RV, a number “we believe has grown consistently over the past 20 years, including during the last economic downturn.”
Camping World would have three classes of common stock, with Class A and Class B shareholders having one vote per share. Chairman and Chief Executive Marcus Lemonis would retain 5% of total voting rights under ownership of Class C shares issued to his wholly owned Delaware limited liability company, ML RV Group.
The preliminary filing indicated Camping World would raise up to $200 million, a figure used to calculate filing fees but that is often changed.
The following statements were culled from the filing by RVBUSINESS.com, the first public disclosure required of the Lincolnshire, Ill.-based mega-retailer in about five years.
Leading Market Position and Scale: “Camping World is the largest and only national RV retail network in the United States, and Good Sam is the largest RV organization in the world, with each of our businesses having a distinct web presence through our e-commerce platforms. Our scale and our long-term stability make us attractive to our suppliers, financiers and real estate investors. The strong relationship with our suppliers enables us to negotiate attractive product pricing and availability. We also align with our suppliers on product development in which we leverage our customer base to provide feedback in exchange for exclusive early launch periods for new products. In recent years, we have also leveraged our supplier relationships to introduce private label products, which has improved our profitability.
On the firm’s management team: “Our management team has an average of 20 years of industry experience. We offer highly competitive compensation tightly tied to performance, which has allowed us to attract and retain our highly experienced management team. Since 2011, our team has increased total revenue from $1,538.5 million to $3,333.3 million for the year ended Dec. 31, 2015, increased net income from $5.4 million to $178.5 million for the year ended Dec. 31, 2015 and increased Adjusted EBITDA from $101.8 million to $253.7 million for the year ended Dec. 31, 2015.”
On the company itself: “Good Sam combined with Camping World in 1997, when the Good Sam Club had approximately 911,000 members and Camping World had 26 retail locations. In 2011, Camping World/Good Sam combined with FreedomRoads, a successful RV dealership business founded in 2003, to form the largest provider of products and services for RVs in North America. Over the past five years, we have continued to invest in our growth, driving an increase in our Active Customer base from approximately 2.6 million as of Dec. 31, 2011, to approximately 3.1 million as of Dec. 31, 2015.”
On retail location acquisition: “The RV dealership industry is highly fragmented with a large number of independent RV dealers. We use acquisitions of independent dealers as a fast and capital-efficient alternative to new retail location openings to expand our business and grow our customer base… Since 2011 we have successfully acquired and integrated 35 new retail locations, and in 2015 we sold two retail locations. Our acquisitions are typically profitable within two full calendar months after an acquisition, with the exception of acquisitions we consider turn-around opportunities, which are typically profitable within two to four months. We intend to continue to pursue acquisitions that will grow our active customer base and present attractive risk-adjusted returns and significant value-creation opportunities.”
On Marcus Lemonis’s voting shares: According to the filing under the heading of “Risks Relating to Our Organizational Structure,” Lemonis, through his beneficial ownership of ML Acquisition and ML RV Group (both Delaware-based limited liability companies partly and wholly owned by Lemonis, respectively), will have “substantial control over us after the consummation of this offering including over decisions that require the approval of stockholders.”
Under the terms presented, ML Acquisition would retain 47% of the combined voting power of all of Camping World Holdings, Inc.’s common stock (provided ML Related Parties owns 27.5% or more of all of the outstanding common units of CWGS, LLC). Also, ML RV Group will own one share of Camping World Holdings, Inc.’s Class C common stock, representing 5% of the combined voting power of all of Camping World Holdings, Inc.’s common stock.
Furthermore, the filing states Lemonis “may approve or disapprove substantially all transactions and other matters requiring approval by our stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance or redemption of certain additional equity interests, and the election of directors.” Finally, the filing also indicates that the voting rights may enable Lemonis to “approve transactions that may not be in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.”