Patrick Industries will acquire LCI Industries in an all-stock deal valued at 1.2440 PATK shares per LCII share, creating a larger RV and marine components supplier.
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Patrick Industries agreed to buy LCI Industries in an all-stock transaction, the companies said Monday. LCI shareholders will receive 1.2440 Patrick shares for each LCI share they hold.
Both companies supply components to the recreational vehicle and marine markets. The deal combines two of the largest players in the RV supply chain, a sector that has seen consolidation as manufacturers seek scale and cost efficiencies. The companies said the combination would strengthen relationships with existing customers and create the largest supplier of RV components in North America.
The companies said the merger would create a more diversified supplier with a broader product lineup and greater geographic reach. Patrick Industries, based in Elkhart, Indiana, has grown through a series of acquisitions. LCI Industries, formerly Lippert Components, is a major supplier of chassis and axles for RVs and other vehicles. The combined company will have a larger presence in the marine and housing markets, the companies said.
The transaction is structured as a merger. LCI shareholders will end up owning about 40% of the combined company, based on the exchange ratio and current share counts. The deal requires approval from shareholders of both companies and regulatory clearance. The companies said they expect the deal to close in the second half of 2025.
The all-stock structure means LCI shareholders will participate in the future performance of the combined company without an immediate tax event. Patrick's management will lead the combined entity, the companies said. The deal does not include a financing condition, since no cash is involved. All-stock deals are common in the RV supply chain because they allow both sets of shareholders to share in the combined company's future.
The RV industry has faced challenges from higher interest rates and slowing demand after a pandemic-era boom. The surge in demand during the pandemic has faded after borrowing costs rose and disposable income tightened. Component suppliers have maintained margins through pricing and efficiency gains. The companies cited potential cost savings from combining manufacturing and supply chains. Patrick Industries said it expects the deal to be accretive to earnings within the first year after closing.
The exchange ratio implies a premium to LCI's recent trading levels, though the exact value will depend on Patrick's share price at closing. Patrick shares were halted ahead of the announcement. LCI shares also were halted.
The deal is the latest in a series of consolidations in the RV supply chain. Patrick Industries said the LCI acquisition is its largest to date. The company has completed more than 30 acquisitions over the past decade, expanding from its core RV business into marine and housing, according to the company.
For LCI shareholders, the all-stock structure means their return depends on Patrick's execution of the integration. The combined company will continue to be listed on the Nasdaq under the ticker PATK. LCI Industries will be delisted after the deal closes.
The companies will hold a conference call Tuesday to discuss the deal.
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