UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

    

FORM 8–K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): February 1, 2019

 

 

Thor Industries, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware

(State or Other Jurisdiction of Incorporation)

1-9235

(Commission File Number)

93-0768752

(IRS Employer Identification No.)

 

601 East Beardsley Avenue,

Elkhart, Indiana

(Address of Principal Executive Offices)

46514-3305

(Zip Code)

 

Registrant’s telephone number, including area code: (574) 970-7460

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company o    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. o    

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement

 

Amendment to Sale and Purchase Agreement

 

As previously disclosed, on September 18, 2018, Thor Industries, Inc. (the “Company”) and Tyr Holdings GmbH & Co. AG, a wholly owned subsidiary of the Company, entered into a Sale and Purchase Agreement (the “Purchase Agreement”) with the shareholders (the “Sellers”) of Erwin Hymer Group SE (“EHG”) for the Company to acquire all of the issued and outstanding shares of capital stock of EHG, a privately held international company and manufacturer of recreational vehicles in Europe and other locations (the “Transaction”). On February 1, 2019, the parties closed the Transaction. In connection with the closing, the parties entered into an amendment to the Purchase Agreement (the “Amendment”) to reflect the exclusion of EHG’s North American operations from the business operations acquired via the Transaction. Among other revisions to the Purchase Agreement, the Amendment (i) documented the fact that EHG sold and transferred the North American operations to be excluded from the Transaction prior to the closing, (ii) reduced the cash purchase price paid by the Company by €170 million (approximately $194 million at the exchange rate as of January 31, 2019), (iii) provided that approximately €180 million (approximately $205 million at the exchange rate as of January 31, 2019) of the cash consideration paid by the Company would be contributed by Sellers to pay down debt of EHG that would otherwise have been assumed in the Transaction and (iv) deferred the Company’s obligation to register the resale of the Company’s common stock issued to the Sellers as consideration in the transaction with the U.S. Securities & Exchange Commission under certain circumstances.

 

At the closing, the Company paid cash consideration of approximately €1.5 billion (approximately $1.7 billion at the exchange rate as of January 31, 2019) and issued 2,256,492 shares of the Company’s common stock to the Sellers. The Company also assumed debt of EHG and its affiliates, of approximately €315 million (approximately $359 million at the exchange rate as of January 31, 2019), a portion of which will be refinanced as of closing. As previously disclosed, the Transaction will generally be treated as having an effective date of May 31, 2018 for tax, economic, and other purposes.

 

Credit Agreements

 

On February 1, 2019, the Company entered into (a) a Term Loan Credit Agreement, among the Company, as borrower, the several lenders from time to time parties thereto and JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent (the “Term Loan Credit Agreement”), and (b) an ABL Credit Agreement, among the Company, certain domestic subsidiaries of the Company (collectively with the Company, the “US Borrowers”), certain subsidiaries of EHG organized under the laws of Germany (collectively, the “German Borrowers”) and a subsidiary of EHG organized under the laws of the United Kingdom (the “UK Borrower”), the several lenders from time to time parties thereto and JPMorgan, as administrative agent (the “ABL Credit Agreement” and, together with the Term Loan Credit Agreement, the “Credit Agreements”). Subject to certain exceptions, the obligations under each of the Credit Agreements are, or will be, guaranteed by each of the Company’s existing and future, direct or indirect, domestic subsidiaries. Additionally, effective as of the closing of the Transaction, subject to certain exceptions and limitations, (i) the German Borrowers will guarantee the obligations of each other German Borrower under the ABL Credit Agreement, (ii) the UK Borrower will guarantee the obligations of each of the German Borrowers under the ABL Credit Agreement and (iii) EHG and certain other non-U.S. subsidiaries of the Company will guarantee the obligations of each of the German Borrowers and the UK Borrower under the ABL Credit Agreement. The obligations of the borrowers under each Credit Agreement are secured by liens on substantially all of the assets of the Company and each of its domestic subsidiaries that are guarantors under the Credit Agreements. The obligations of the UK Borrower and the German Borrowers under the ABL Credit Agreement will additionally be secured by liens on substantially all of the assets of the non-U.S. subsidiaries of the Company that guarantee their respective obligations under the ABL Credit Agreement.

 

Subject to earlier termination, the Term Loan Credit Agreement matures on February 1, 2026 and the ABL Credit Agreement terminates on February 1, 2024. In connection with the closing of the Transaction, the Company borrowed an aggregate amount of approximately EUR 617.7 million, under a Euro denominated term loan, and approximately $1,386.4 million, under a United States Dollar denominated term loan, respectively, pursuant to the Term Loan Credit Agreement, and $100.0 million under the ABL Credit Agreement in order to provide funding for, among other things, the cash consideration to be paid to the EHG shareholders, the refinancing of specified existing EHG indebtedness, the refinancing of existing indebtedness of the Company, and to pay fees and expenses related to the Transaction.

 

The Company may, at its option, prepay any borrowings under the Term Loan Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except in certain circumstances). Pursuant to the Term Loan Credit Agreement, the Company is required to repay the aggregate outstanding principal amount of the borrowings under the Term Loan Credit Agreement in quarterly installments on the first day of each August, November, February and May, commencing May 1, 2019, and ending with the last such day to occur prior to the maturity date, in an aggregate amount for each such date equal to the aggregate principal amount of the initial loan amount (as such amount shall be adjusted pursuant to the prepayment provisions of the Term Loan Credit Agreement) multiplied by 0.25%. In addition, the Company must make mandatory prepayments of principal under the Term Loan Credit Agreement upon the occurrence of certain specified events, including certain asset sales, debt issuances and receipt of annual cash flows in excess of certain amounts. Any remaining outstanding principal balance under the Term Loan Credit Agreement is repayable on the maturity date. Amounts repaid or prepaid by the Company with respect to the loans under the Term Loan Credit Agreement cannot be reborrowed.

 

The Company may add one or more incremental term loan facilities to the Term Loan Credit Agreement, subject to obtaining commitments from any participating lenders and certain other conditions. Under the Term Loan Credit Agreement, loans generally may bear interest based on EURIBOR, LIBOR or an annual base rate, as applicable, plus, in each case, an applicable margin.

 

The revolving credit facility under the ABL Credit Agreement has total commitments of $750.0 million. A portion of the ABL Credit Agreement of up to $75.0 million is available for the issuance of letters of credit, and a portion of the ABL Credit Agreement of up to $75.0 million is available for swingline loans. The Company may also increase commitments under the ABL Credit Agreement in an aggregate principal amount of up to $150.0 million by obtaining additional commitments from lenders, subject to obtaining commitments from any participating lenders and certain other conditions. Borrowings by the German Borrowers and the UK Borrower are also subject to an applicable sublimit.

 

 

Availability under the ABL Credit Agreement for each borrower is subject to a borrowing base based on a percentage of applicable eligible receivables and eligible inventory. Subject to certain exceptions, availability of borrowings of the US Borrowers is subject to an aggregate borrowing base of the US Borrowers, availability of borrowings of each of the German Borrowers is subject to the borrowing base of each such German Borrower and the availability of borrowings of the UK Borrower is subject to the borrowing base of the UK Borrower. Eligible receivables and eligible inventory under the applicable German borrowing base and the UK borrowing base may be counted towards the applicable borrowing base only after a lien has been perfected on those assets. The Company will continue to work towards perfecting the liens on those assets so that the availability under the borrowing bases of each of the German Borrowers and UK Borrower may be used as soon as practical after the closing of the Transaction.

 

Under the ABL Credit Agreement, loans generally may bear interest based on EURIBOR, LIBOR or an annual base rate, as applicable, plus, in each case, an applicable margin that is based on adjusted excess availability (as determined under the ABL Credit Agreement). Each borrower may, at its option, prepay any borrowings under the ABL Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except in certain circumstances). Borrowings under the ABL Credit Agreement are also subject to mandatory prepayment in certain circumstances, including in the event that borrowings exceed applicable borrowing base limits.

 

The Credit Agreements contain certain customary representations, warranties, and covenants of the Company and its subsidiaries for the benefit of the applicable administrative agent and the applicable lenders thereunder. The ABL Credit Agreement also contains a financial covenant, which requires the Company to maintain a consolidated fixed charge coverage ratio, provided that the financial covenant under the ABL Credit Agreement is only applicable when adjusted excess availability falls below a certain threshold. The obligations under the Credit Agreements may be accelerated or the commitments terminated upon the occurrence of events of default under the Credit Agreements, which include payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, cross defaults to other material indebtedness, defaults arising in connection with changes in control, and other customary events of default.

 

In the ordinary course of their respective businesses, certain of the lenders and the other parties to the Credit Agreements and their respective affiliates have engaged, and may in the future engage, in commercial banking, investment banking, financial advisory or other services with the Company and its affiliates for which they have in the past and/or may in the future receive customary compensation and expense reimbursement.

 

The foregoing descriptions of the Purchase Agreement, the Amendment and the Credit Agreements do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, which was filed with the Company’s Quarterly Report on Form 10-Q for the period ending October 31, 2018, and the Amendment and Credit Agreements, which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ending April 30, 2019.

 

Item 1.02 Termination of a Material Definitive Agreement.

 

On the date of the closing of the Transaction, the Company terminated the Credit Agreement, dated as of June 30, 2016, among the Company, each of the Company’s subsidiaries from time to time a party thereto, as a borrower, each of the Company’s subsidiaries from time to time party thereto, as a guarantor, each lender from time to time a party thereto, and BMO Harris Bank N.A., as administrative agent (the “Terminated Credit Agreement”), which provided an asset-based revolving line of credit in the maximum aggregate principal amount at any time outstanding of $500.0 million, subject to the terms, provisions, and limitations of the Terminated Credit Agreement. On the date of the closing of the Transaction, there was no principal or interest outstanding under the Terminated Credit Agreement. No early termination penalties were incurred by the Company in connection with the termination of the Terminated Credit Agreement.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The Company’s common stock issued in the Transaction was issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act as a sale by an issuer not involving any public offering.

 

Item 7.01 Regulation FD Disclosure.

 

On February 1, 2019, the Company issued a press release announcing the closing of the Transaction. In addition, the Company provided certain supplementary materials available to investors on the Company’s website at http://ir.ThorIndustries.com, including a presentation and a question and answer document. Copies of the Company’s press release, the presentation, and the question and answer document are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated by reference herein.

 

In accordance with general instruction B.2 to Form 8-K, the information set forth in Item 7.01 of this Form 8-K (including as incorporated by reference from Exhibits 99.1, 99.2 and 99.3) shall be deemed “furnished” and not “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

 

 

Item 9.01 Financial Statements and Exhibits

 

The financial statements and pro forma financial information with respect to the Transaction required by Item 9.01 of Form 8-K will be included in an amendment to this Form 8-K by not later than 71 calendar days after the date that the initial report on Form 8-K is required to be filed.

 

(d) Exhibits

 

Exhibit Number Description
   
99.1 Copy of press release, dated February 1, 2019, issued by the Company.
99.2 Copy of Company presentation posted on the Company’s website on February 1, 2019
99.3 Copy of the question and answer document posted on the Company’s website on February 1, 2019

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Thor Industries, Inc.
     
Date: February 1, 2019 By:   /s/ Colleen Zuhl
  Name: Colleen Zuhl
  Title: Senior Vice President and
  Chief Financial Officer

 

 

 
Exhibit 99.1   
 

Thor Announces Closing of Erwin Hymer Group Acquisition



- Combination creates the global leader in the recreational vehicle market

- Acquisition consistent with Thor's long-term strategic growth plan

- Carve out of Erwin Hymer Group's North American operations from the transaction resulted in a purchase price reduction of €170 million, and a €180 million reduction in the obligations the Company would have otherwise assumed under the terms of the original stock purchase agreement

ELKHART, Ind., Feb. 1, 2019 /PRNewswire/ -- Thor Industries, Inc. (NYSE: THO) today announced it has completed its acquisition of Erwin Hymer Group (EHG), one of Europe's largest makers of recreational vehicles (RVs), effective February 1, 2019. The combination of Thor and EHG creates the world's largest RV manufacturer, with leading positions in both North America and Europe. The acquisition excludes EHG's North American businesses, and reflects a €170 million (approximately $194 million) purchase price reduction and a €180 million (approximately $205 million) reduction in the obligations the Company would have otherwise assumed under the terms of the original stock purchase agreement.

"This is an exciting time for Thor as we complete the acquisition of Erwin Hymer Group, and immediately gain a leading position in the dynamic European RV market," said Bob Martin, Thor President and CEO. "Europe, the second largest market for RVs globally, is the most logical place to begin the next chapter of Thor's growth. Having built relationships with the EHG management team over the course of several years, the opportunity to enter the European market with a European industry leader fits squarely within our strategic plan. EHG brings tremendous strengths in product development, technology and production efficiency that complement Thor's historic strength in the North American market, making our combined company the undisputed global leader in the RV market."

"We are committed to our strategic growth plan, and, since the acquisition of Jayco in 2016, we have evaluated numerous opportunities, ultimately deciding the best path for long-term growth was expanding our core RV business geographically into the European market. Now that the purchase is closed, we can focus on our action plans to achieve meaningful operational synergies and sharing of best practices throughout our global operations," Martin added.

Martin Brandt, CEO of Erwin Hymer Group, commented, "The closing of the sale of EHG to Thor marks the beginning of the next phase in the growth of our business. We are excited to begin working together, learning from each other, enhancing our operations and ultimately providing a satisfying experience for our customers and their families. As we begin to leverage the combined talent of our companies and share best practices across the globe, we are more optimistic than ever about the future and the results that will be achieved by the combined company."

Christian Hymer, son of the late founder, Erwin Hymer, and member of the EHG Supervisory Board, said, "In Thor, we found the ideal, long-term strategic owner for the great company that our father built. Thor will provide the resources needed to foster the ongoing entrepreneurial spirit that is the foundation of the Erwin Hymer Group and permeates both companies' corporate cultures. As significant shareholders, our family is fully committed to the long-term success of Thor and the Erwin Hymer Group."

The acquisition consists of EHG's European operations, which represent the vast majority and core of EHG's historical operations and are the driving strategic rationale for the acquisition. The acquisition of EHG provides attractive growth opportunities for the combined company, both in the near and long term, through EHG's leading position in the growing European RV market.

As the Company announced on January 21, 2019, the acquisition excludes EHG's former North American operations. The exclusion of EHG's North American operations from the transaction resulted in the financial terms of the stock purchase agreement being amended to reduce both the purchase price by €170 million (approximately $194 million) and the obligations the Company would have otherwise assumed by €180 million (approximately $205 million). The purchase price adjustment resulted in a corresponding reduction in the acquisition financing debt the Company syndicated to fund the purchase. The equity consideration component of the acquisition price was fixed at 2.3 million shares with the original stock purchase agreement, and was unchanged.

Transaction Closing Details

  • The purchase price was funded through a combination of available cash of approximately $95 million debt, and the issuance of 2.3 million shares of Thor common stock.
  • The debt financing consists of two credit facilities led by J.P. Morgan and Barclays:
    • $2.1 billion Term Loan B with a 7-year maturity, consisting of a $1.4 billion tranche and a €618 million tranche (approximately $704 million).
    • $750 million, 5-year senior secured asset based loan facility of which approximately $100 million was utilized as of closing.

"Our balance sheet has historically been a strength for Thor and we intend to maintain that strength and balance sheet discipline," said Colleen Zuhl, Thor Senior Vice President and CFO. "With the closing of the EHG acquisition, our focus will be on reducing leverage while continuing to invest in our long-term growth initiatives and return capital to our shareholders. We anticipate being able to significantly reduce our debt levels using internally generated cash flows over the next two to three years."

Transaction-Related Costs
Costs relating to the acquisition will be included in Thor's 2019 quarterly financial results. Specific estimates of the dollar values of these costs are not yet available for the second quarter, however these costs will be comprised of the following categories, among others:

  • Loss on the foreign currency forward contract. The foreign currency forward contract was used to lock in an exchange rate at the September 2018 announcement date, and will be adjusted to market value at the end of the second quarter and will be closed out with any remaining gain or loss recognized in Thor's third-quarter results.
  • Transaction-related costs for legal, professional and advisory fees related to financial due diligence, preliminary implementation costs and regulatory review costs.
  • Interest expense (including ticking fee) charges.

Transaction-related costs, including professional, legal and advisory fees related to closing of the transaction as well as the integration and implementation of enhanced controls consistent with SOX requirements plus the expensing of capitalized fees related to the prior Thor debt facility, are expected to be in the range of $40 million to $55 million for the 9-month period subsequent to our first quarter which ended on October 31, 2018. This estimate excludes any loss on the foreign currency forward contract, purchase accounting adjustments and future interest charges.

Thor anticipates providing pro-forma financial statements for the combined company in a filing with the Securities and Exchange Commission within 75 days after closing.

"We see many opportunities to grow our combined business, and we are excited to share details regarding many of these initiatives with our investors over the coming quarters. We are already moving forward with teams that are on the ground, ready to leverage the best of Thor and the Erwin Hymer Group to create significant bottom-line enhancements through the sharing of best-in-class operating practices and by continuing to enhance the customer experience throughout the worldwide RV market. We have near-term opportunities to enhance our procurement strategies, leverage technology and engineering resources, cross-pollinate aftermarket support and dealer development methods that will be essential to our integration of EHG" added Martin.

"Since Thor's founding with the acquisition of Airstream in 1980, we have consistently worked to maximize long-term shareholder value," said Peter B. Orthwein, Thor Executive Chairman. "With the European market in an earlier stage of recovery than the North American market, this largest acquisition in our Company's history is happening at the right moment to join with a leader in the European RV market to accelerate our long-term growth. Completing this acquisition illustrates the optimism we have for our business and our markets, and the confidence we have in our team's ability to effectively manage our now global business."

About Thor Industries, Inc.
Thor is the sole owner of operating subsidiaries that, combined, represent the world's largest manufacturer of recreational vehicles. For more information on the Company and its products, please go to www.thorindustries.com .

Forward Looking Statements
This release includes certain statements that are "forward looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management's current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ materially from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations; raw material, commodity or chassis supply restrictions; the impact of tariffs on material or other input costs; the level and magnitude of warranty claims incurred; legislative, regulatory and tax law and/or policy developments including their potential impact on our dealers and their retail customers or on our suppliers; the costs of compliance with governmental regulation; legal and compliance issues including those that may arise in conjunction with recently completed or announced transactions; lower consumer confidence and the level of discretionary consumer spending; interest rate fluctuations; the potential impact of interest rate fluctuations on the general economy and specifically on our dealers and consumers; restrictive lending practices; management changes; the success of new and existing products and services; consumer preferences; the ability to efficiently utilize production facilities; the pace of acquisitions and the successful closing, integration and financial impact thereof; the potential loss of existing customers of acquisitions; our ability to retain key management personnel of acquired companies; a shortage of necessary personnel for production; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impairment charges; cost structure changes; competition; the impact of potential losses under repurchase agreements; the potential impact of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; general economic, market and political conditions; and changes to investment and capital allocation strategies or other facets of our strategic plan. Additional risks and uncertainties surrounding the acquisition of Erwin Hymer Group SE (the "Erwin Hymer Group") include risks regarding the potential benefits of the acquisition and the anticipated operating synergies, the integration of the business, changes in Euro-U.S. dollar exchange rates that could impact the mark-to-market value of outstanding derivative instruments, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and Erwin Hymer Group's business. These and other risks and uncertainties are discussed more fully in Item 1A of our Annual Report on Form 10-K for the year ended July 31, 2018 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ended October 31, 2018.

We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.

Contact
Mark Trinske
Vice President of Investor Relations
(574) 970-7912
mtrinske@thorindustries.com



 

Exhibit 99.2

 

www.thorindustries.com Closing – February 2019 +

Forward Looking Statement This presentation includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ materially from our expectations. Factors which could cause materially different results inc lude, among others, raw material and commodity price fluctuations; raw material, commodity or chassis supply restrictions; the impact of tariffs on material or other input costs; the level and magnitude of warranty claims incurred; legislative, regulat ory and tax law and/or policy developments including their potential impact on our dealers and their retail customers or on our suppl ier s; the costs of compliance with governmental regulation; legal and compliance issues including those that may arise in conjuncti on with recently completed or announced transactions; lower consumer confidence and the level of discretionary consumer spending; interest rate fluctuations; the potential impact of interest rate fluctuations on the general economy and specifica lly on our dealers and consumers; restrictive lending practices; management changes; the success of new and existing products and services; consumer preferences; the ability to efficiently utilize production facilities; the pace of acquisitions and the su cce ssful closing, integration and financial impact thereof; the potential loss of existing customers of acquisitions; our ability to r eta in key management personnel of acquired companies; a shortage of necessary personnel for production; the loss or reduction of sales to key dealers; disruption of the delivery of units to dealers; increasing costs for freight and transportation; asset impair men t charges; cost structure changes; competition; the impact of potential losses under repurchase agreements; the potential impac t of the strength of the U.S. dollar on international demand for products priced in U.S. dollars; general economic, market and political conditions; and changes to investment and capital allocation strategies or other facets of our strategic plan. Addi tio nal risks and uncertainties surrounding the acquisition of Erwin Hymer Group SE (the "Erwin Hymer Group") include risks regarding the potential benefits of the acquisition and the anticipated operating synergies, the integration of the business, changes i n Euro - U.S. dollar exchange rates that could impact the mark - to - market value of outstanding derivative instruments, the impact of exchange rate fluctuations and unknown or understated liabilities related to the acquisition and Erwin Hymer Group's business . These and other risks and uncertainties are discussed more fully in Item 1A of our Annual Report on Form 10 - K for the year ended July 31, 2018 and Part II, Item 1A of our quarterly report on Form 10 - Q for the period ended October 31, 2018. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this release or to reflect any change in our expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law. 2

Table of Contents » Combining the Premier North American & European RV Companies…………………………………………………………. 4 » EHG – An Unprecedented Opportunity…………………………….. 12 » Strategic Path Forward to Maximizing Shareholder Value………. 21 » Appendix……………………………………………………………… 26 3

Combining the Premier North American & European RV Companies 4

Transaction Overview 5 Transaction Highlights » Purchase price funded with cash and equity » Accretive to earnings per share (before synergies, purchase accounting adjustments, transaction - related expenses and deal - related interest expense) Financing » The purchase price was funded through a combination of available cash of approximately $95 million, debt and the issuance of 2.3 million shares of Thor common stock: » The debt financing consists of two credit facilities led by J.P. Morgan and Barclays: ◦ Term loan B, 7 - year, $2.1 billion consisting of two tranches: ◦ $1.4 billion ◦ €618 million (approximately $704 million) ◦ Senior secured asset based loan (ABL), 5 - year, $750 million maximum available credit ◦ Used $100 million at closing ◦ Additional availability of approximately $400 million

Snapshot of Combined Company 6 Broadens Global Footprint Balances Product Mix Notes: 4Q CY2018 average exchange rate of USD / EUR: 1.14; Revenue based on FYE 7/31/2018 for Thor (audited) and FYE 8/31/201 8 f or EHG, unaudited Revenue ($ billions) Revenue (%) Revenue (%) $8.3 $10.9 $2.6 North America 100% Europe 98% RoW 2% North America 76% Europe 23% RoW < 1% Towable 72% Motorized 26% Other 2% Motorized 78% Towable 13% Other 9% Towable 58% Motorized 38% Other 4% Based on FY 2018 Results Adds Scale

7 *Before anticipated synergies, purchase accounting adjustments, transaction - related expenses and deal - related interest expense Aligned with Thor’s strategic plan to enhance shareholder value – transaction to be accretive to earnings in first full year* Creates the #1 global RV manufacturer with a leading portfolio of brands, dealer network and global reach Numerous areas of near - term and long - term synergies between the two companies Significant mutual benefits derived from sharing design, R&D, technology, engineering and manufacturing excellence Establishes a leadership position in growing European RV market with a complementary and geographically diverse product portfolio

Synergies Expected to Create Meaningful Additional Value 8 Sharing of Best Practices » Engineering & Design » R&D and Technology » Marketing » Human Resources Strategies » Dealer Network / Dealer Development » Aftermarket Support Strategies Thor and EHG to Mutually Benefit from Leveraging Manufacturing and Financial Management Expertise » Overall Spending Leverage » Procurement Strategies / Direct Sourcing of Certain Components » Production Methodologies » Working Capital Management » Global Talent Development » Access to New Markets / Cross Marketing Opportunities » Technology Advances / Product and Operational Development

» Near - term synergy opportunities: ◦ Productivity and best practices – Thor has a history of product speed to market while EHG has strength in engineering and technology such that each side will benefit ◦ Engineering and product development – EHG has considerable strength in technology, which can be leveraged to the North American market ◦ Quality – EHG has reputation for high product quality that aligns well with Thor’s historically strong North American production ◦ Opportunities to enhance product features in both markets for competitive advantage – in each case, there are opportunities to bring product features popular in the North American or European markets to the other market, enhancing customer experience and building market share ◦ Purchasing and supplier relationships – common suppliers in both markets can provide enhanced service and better volume pricing, while suppliers in only one market can support expansion into the other market 9

Shared Commitment to Innovation » EHG has a history of innovation ◦ Technological innovations within and around coaches, including applying technology to address coach operation ◦ Interior innovation to maximize usable living space – (Urban Camper) ◦ Increased focus on mobility and ease of use for older consumers ◦ Higher use of assembly automation within their production facilities » There are also opportunities to leverage Thor’s innovations, notably slideouts 10 Opportunities for sharing technology to improve product design and quality in North American and European markets with significant potential top - line impact

Financial Impact of Closing » Costs relating to the acquisition will be included in Thor’s 2019 quarterly financial results. Specific estimates of the dollar values of these costs are not yet available for the second quarter, however these costs will be comprised of the following categories, among others: ◦ Loss on the foreign currency forward contract. The foreign currency forward contract was used to lock in an exchange rate at the September 2018 announcement date, and will be adjusted to market value at the end of the second quarter and will be closed out with any remaining gain or loss recognized in Thor’s third - quarter results. ◦ Transaction - related costs for legal, professional and advisory fees related to financial due diligence, preliminary implementation costs and regulatory review costs. ◦ Interest expense (including ticking fee) charges. » Transaction - related costs, including professional, legal and advisory fees related to closing of the transaction as well as the integration and implementation of enhanced controls consistent with Sarbanes - Oxley Act (SOX) requirements plus the expensing of capitalized fees related to the prior Thor debt facility, are expected to be in the range of $40 million to $55 million for the 9 - month period subsequent to our first quarter which ended on October 31, 2018. 11

EHG – An Unprecedented Opportunity 12

» Leading position in a growing RV market ◦ European RV market recovery is 2 - 3 years behind the North American recovery ◦ European RV market has not yet reached pre - recession levels » EHG management has embarked on a performance enhancement plan over the past 12 months that is just starting to bear results » European RV market is highly fragmented with many smaller competitors that could present consolidation opportunities over time 13

» Solid anticipated cash flow generation ◦ Cash priorities will be to reduce leverage, reinvest in the business and return cash to shareholders » Expected to be accretive within the first full year: ◦ Excluding synergies, purchase accounting adjustments, transaction - related expenses and incremental interest expense ◦ With opportunities to share best practices across the global Company, accretion will likely be enhanced over time 14

Erwin Hymer Group Overview 15 Motor Caravans 72 % Campervans 1 3 % Caravans 1 5 % By t y pe 3 €2.1 bn 1 As of EHG FYE 08/31/18 (unaudited); 2 Total revenues; 3 Vehicle revenues only, excludes revenues from accessories, services, rental, and others; 4 4Q CY2018 average exchange rate of USD / EUR:1.14 Vehicles 88 % Own D ealerships 5 % By segment 2 Accesso r ies and S ervices 3 % Rental 3 % €2.3 bn Other <1% Germany 50 % UK 1 2 % France 8 % RoW 2 % By region 2 €2.3bn RoE 29 % 2018 Revenue breakdown 1 EHG is the leading manufacturer of recreational vehicles in Europe, with ~29% market share $2.6bn 4 $2.6bn 4 $2.4bn 4 U.S. Europe RV categories Travel Trailer Class B Class A / C Caravan Campervan Motor Caravan = = =

Erwin Hymer Group Key Statistics 16 1957 HYMER FAMILY BEGAN RECREATIONAL VEHICLE PRODUCTION ~58K UNITS SOLD IN FY 2018 20 RENOWNED BRANDS €2.3B REVENUE FY18* ~6,400 DEDICATED EUROPEAN TEAM MEMBERS IN 2018 9 RV PRODUCTION FACILITIES IN GERMANY, UK, ITALY AND CHINA ~1,000 DEALERS ACROSS 33 COUNTRIES ~29% EUROPEAN MARKET SHARE BY REVENUE *For fiscal year ended August 31, 2018 (unaudited)

Confidential / preliminary 42 71 110 250 39 51 7 2 ² 163 141 RoW Bad Waldsee » Distributes vehicle brands through approximately 1,0 00 retail dealerships worldwide, across 3 3 countries Number of active vehicle dealerships¹ by country (FY2016/17) Notes: ¹ Number may vary within a small range due to fluctuations in the dealer base; ² Separate dealer network that serves former Explorer Group brands Elddis, Xplore, Compass and Buccaneer Domestic (distribution organized by brand) Served through distribution companies Headquarter s 17 EHG European Distribution Network

18 Leading European RV manufacturer Strong management team with proven ability to grow the business and deliver innovative products Diversified geographic exposure to fast - growing European RV market Well - recognized brands with a highly complementary product portfolio History of industry - leading innovation

EHG Management Team 19 » CEO since August 2015 » Prior experience with Zumtobel, Assa Abloy and Mercer Management Consultants » CFO since September 2017 » Prior experience with Bizerba, Spheros, Sennheiser and Kosta » CSO since December 2017 » Held EHG management positions since 2008 » Prior experience with MAN and Neoplan » COO starting February 2019 » Prior experience with BOS GmbH & Co. KG and Brose Group Martin Brandt – CEO Stefan Junker – CFO Jan de Haas – CSO Jan Francke – COO Experienced, proven CEO and management team that are committed to the ongoing success of EHG

EHG Has a Long Track Record of Industry - Leading Product Innovation 20 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s 1968 Wheel housing refrigerator 1966 Crank handle skylights 1976 Pull - down double bed for motorcaravans 1975 - 76 Pop - top roof for campervans 1986 First OEM to guarantee 6 years waterproofness 1978 PUAL 1 technology based walls 1996 Introduction of central locking to EHG models 1993 - 94 Development of Hymer bonding technology 2012 - 15 Lightweight technology leads to first integrated MC on Mercedes Benz basis 2 2000 Introduction of heated double floors 1 Polyurethane foam is filled into the walls to enhance insulation and stability 2 Below 3.5t (Hymermobil ML - I) Marketing / PR campaign Sunlight factory team Safety Niesmann+Bischoff Flair Exterior Design Dethleffs Coco Bloggers Favorite Concept Car e.home Technology Hymer B - SL SLC Chassis Overall campervan concept Hymer DuoCar Floor plan Bürstner Lyseo TD 745 Recent award - winning innovations Industry standard setting innovations Major innovations in Hymer products

Strategic Path Forward to Maximizing Shareholder Value 21

Our Strategic Path Thor has a history of strong growth both organically and through acquisition Ultimately expanding globally maximizes potential returns relative to potential risk 22 With an industry leading position in North America, we faced a crossroads: Acquire suppliers and pursue vertical integration – steep learning curve and offset the benefits inherent in our variable cost structure → high risk vs. low reward Expand into recreational product markets – steep learning curve to understand markets, suppliers, distribution that may be very different from our RV business → high risk vs. moderate reward Expand RV business beyond North America – more modest learning curve with strong expertise → less risk vs. higher reward

Strategic Growth Parameters 23 Thor and EHG make a solid strategic and cultural fit for long - term growth Once the decision was made to expand globally, we sought to identify the markets with the best long - term growth potential: Australia is an attractive market, the third largest globally, with well developed infrastructure and supply chain for RVs Asia - Pacific is also an attractive market, though somewhat early in the development of infrastructure and supply chain for RVs Europe is the second largest market globally with well developed infrastructure and supply chain for RVs

Thor Acquisition Criteria      24 Strong leadership team Strong history of quality Focus on innovation Market leader Future growth opportunities

Thor Industries Capital Strategy FY19 & Beyond 25 Anticipated strong cash flow to support a balanced approach to debt reduction, growth investments and returns to shareholders 1 2 3 4 Reduce Outstanding Debt Return Capital to Shareholders with Predictable Dividend Growth and Strategic Share Repurchases Opportunistically Fund Acquisitions in Global RV Industry – both Core and Adjacencies Invest in Organic Growth Initiatives

26 Appendix

European RV Industry 27 29% 28% 9% 6% Others 28% 2017 European RV market share (by sales) 2017 Europe RV market overview (€ bn) €6.1bn 65% 21% 14% Motorcaravan Caravan Campervan €2.9 €4.0 €6.0 2012A 2017A 2022E €1.1 €1.3 €1.6 2012A 2017A 2022E €0.2 €0.9 €1.5 2012A 2017A 2022E Source: Company information, leading consulting firm

Comparison of North American & European Markets Business North America Europe Dealer Network Independent, non - franchise dealer network with limited exclusive relationships. Dealer base consolidating. Independent, non - franchise dealer network with more exclusive relationships. Dealer base not yet consolidating. Dealer Financing Inventory financed via independent floorplan lenders. Inventory financed via independent floorplan lenders. Consumer Purchases Consumers purchase via outside financing or cash. Consumer purchases vary by country based on tax law and other regulations. Emerging Consumer Trends New, younger consumers with preference toward towables. New, younger consumers with preference toward smaller motorcaravans and campervans. Competition Highly competitive market that has largely consolidated . Somewhat more fragmented with potential for further consolidation. 28 Business North America / Thor Europe / EHG

Comparison of North American & European Markets Business North America Europe Cost Structure Variable cost structure: assembly vs. manufacturing. Largely v ariable cost structure: assembly vs. manufacturing. Labor Non - union workforce with focus on attracting and retaining workers. Stable labor market with works councils, labor regulations according to different local jurisdictions. Business Regulation Vehicle, safety and emissions regulations administered by Federal and state regulators. Vehicle, safety and emissions regulations administered by EU and national regulators. Consumer Focused Regulation Size limits (45 ft. length) in North America, no additional operator licensing requirements for personal use. Operator license requirements include weight limits for recreational vehicles (motorized or combined towable + tow vehicle), resulting in preference for motorized. 29 Business North America / Thor Europe / EHG

Comparison of North American & European Markets Business North America Europe Number of Dealerships ~ 2,300 (Thor Only) ~ 1,000 (EHG Only) Manufacturing Facilities 192 RV production facilities in Indiana, Ohio, Oregon and Idaho (Thor Only) 9 RV production facilities in Germany, the UK, Italy and China (EHG Only) Industry - Wide Wholesale Unit Shipments North America: 504,599 (C Y 2017) Europe: Wholesale statistics are not published Top 3 OEM Market Share 90% (Thor, Forest River and Winnebago ) 66% (EHG, Trigano and Knaus Tabbert) Towable vs. Motorized 88% Towable 12% Motorized 21% Towable (based on revenue) 79% Motorized (based on revenue) Retail Data Sources Statistical Surveys www.statisticalsurveys.com CIVD www.civd.de 30 Business North America / Thor Europe / EHG

European RV Market Earlier in Recovery New Vehicle Registrations by Continent (’000) 31 207 201 192 170 151 146 138 135 140 143 152 162 166 174 182 198 203 210 208 189 154 150 156 147 137 140 152 168 188 168 144 141 162 182 217 222 219 220 253 272 274 251 274 292 324 320 310 366 289 206 228 247 264 304 333 376 416 470 0 50 100 150 200 250 300 350 400 450 500 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Europe North America Sources: CIVD; Statistical Surveys

32 Product Line - up Spans Across Multiple Price Points & Categories » Motorized recreational vehicles » Price range 1 : » €32,000 – € 20 0,000 » $3 6 , 500 – $2 28 , 200 » Towable recreational vehicles » Price range 1 : » €8,700 – €45,000 » $ 9 , 900 – $5 1 , 300 » Motorized recreational vehicle on van chassis » Price range 1 : » €32,000 – € 75 ,000 » $3 6 , 500 – $ 85,600 » Caravanning equipment, camping accessories and tent trailers » Chassis and suspension technology » Global rental of recreational vehicles » Consulting and financing services for dealers » Online travel portal » ~27,300 vehicles sold 2 ( 82 , 800 total market ) » ~16,700 vehicles sold 2 (7 7 , 600 total market) » ~ 7 , 4 00 vehicles sold 2 » ~ 1 , 5 00 vehicles in rental fleet 3 Notes: 4Q CY2018 average exchange rate of USD / EUR:1.14 1 Manufacturer selling price; 2 FYE 2017A, EHG unit sales , Campervans includes units sold to OEMs ; 3 Excluding franchises 33.0 % b y v olum e 21.5% by volume Motorcaravans Caravans Campervans Accessories & Services Other

Select EHG Brands 33 Notes: Brands ordered alphabetically; CB – Class B campervan; M – Class A / C; T – Towable; 4Q CY2018 average exchange rate of U SD / EUR:1.14 Excludes UK brands (Elddis, Xplore, Compass, and Buccaneer) Segment Products Price (€k) Price ($k) Positioning Mainstream CB, M, T <10 – 95 11 – 108 Chic, modern and convenient Entry CB, M 30 – 50 34 – 57 Functional, reliable value Mainstream M, T 10 – 115 11 – 131 Reliable , sporty and classic Entry M 25 – 55 28 – 63 Stylish, contemporary and accessible Premium CB, M, T 15 – 115 17 – 131 Dynamic , innovative and reliable Premium M 40 – 105 46 – 120 Comfort, style and elegance Mainstream M, T 15 – 75 17 – 86 Trustworthy and classic Luxury M 75 – 200 86 – 228 Powerful, inspiring, market - leading Entry CB, M 30 – 50 34 – 57 Adventurous, uncomplicated value

EHG History 34 0 1957 1990 1991 1996 1998 2000 2004 2005/6 2011 2018 1 CMC Founded by Erwin Hymer in 1980; 2 Manufacturer of recreational vehicles for Carado and Sunlight brands 2013 Successful delisting of Hymer AG and return to 100% Hymer family ownership as a prerequisite to merge CMC Caravan and Hymer Start of Erwin Hymer as recreational vehicle manufacturer Merger of CMC Caravan into Erwin Hymer Group (EHG) 2015 2016 2017 Initial public offering as Hymer AG EHG Acquired CMC 1 Acquired Hymer AG Acquired Founding of Movera as Hymer AG and CMC joint venture Hymer AG Acquired Hymer AG Acquired Founding of Capron JV, Carado and Sunlight 2

Helpful EHG Websites » EHG RV Businesses: ◦ Hymer – hymer.com ◦ Carado – carado.de ◦ Sunlight – sunlight.de ◦ 3DOG – 3dogcamping.eu ◦ Elddis, Compass, Xplore and Buccaneer – elddis.co.uk ◦ Bürstner – buerstner.com ◦ Dethleffs – dethleffs.de ◦ Eriba – eriba.com ◦ Etrusco – etrusco.com ◦ Laika – laika.it ◦ LMC – lmc - caravan.de ◦ Niesmann + Bischoff – niesmann - bischoff.com/de/ » EHG Rental Businesses: ◦ McRent – mcrent.de ◦ rent easy – rent - easy.de » EHG Accessories Businesses: ◦ Goldschmitt – goldschmitt.de ◦ Movera – movera.com 35

 

 

 

Exhibit 99.3

 

THOR INDUSTRIES AND ERWIN HYMER GROUP (EHG)

 

Combining the Premier North American & European RV Companies and Creating a Premier Global RV Manufacturer:

 

· Aligned with Thor’s strategic plan to enhance shareholder value – transaction to be accretive to earnings in first full year, excluding synergies, purchase accounting adjustments, transaction-related expenses and incremental interest expense.

· Creates the #1 global RV manufacturer with a leading portfolio of brands, dealer network and global reach.

· Establishes a leadership position in growing European RV market with a complementary and geographically diverse product portfolio.

· Significant mutual benefits derived from sharing design, R&D, technology, engineering and manufacturing excellence.

· Numerous areas of near-term and long-term synergies between the two companies.

· Strong management team with proven ability to grow the business and deliver innovative products.

 

The following questions and answers are presented to enhance investors’ understanding of the acquisition and the exciting long-term growth opportunities presented by Thor and EHG.

 

1. Why did Thor choose to execute on such a large M&A transaction instead of embarking on an equally large share buyback program based on current valuation levels? Our strategic plan focused on staying true to our core strength of RV manufacturing and sales with a new focus on establishing a more substantial global footprint. The unparalleled opportunity to acquire EHG, Europe’s largest RV manufacturer, allowed us to significantly advance our strategic plan in terms of both timing and substance. Thor’s new global presence will drive value to our shareholders for decades to come. While we agree that our stock value has been depressed during this year and that a buyback presented an opportunity, the long term value creation opportunity presented by this acquisition outweighed the value that could have been realized in a stock buyback. Further to the strategic positioning of this acquisition, we would add:

 

a. Given the current market environment, we believe that providing our shareholders with access to the faster growth in the European market is an attractive strategy for deploying capital that will provide a long-term enhancement to shareholder value.

 

b. Not only is EHG one of the largest OEMs in Europe, they also have a history, similar to ours, of successfully growing their business both organically and through acquisition.

 

c. This acquisition provides Thor a unique opportunity to establish a leadership position in the attractive and growing €6 billion* European RV market (* market size estimate is 2017 data ).

 

d. The value creation that we anticipate from synergies is an additional opportunity that Thor uniquely enjoys and that will be beneficial to our shareholders.

 

e. The addition of EHG is anticipated to enhance Thor’s historically strong cash flow profile and to provide further diversification of regional-economic and product mix, which we believe will serve shareholders well over the long term.

 

f. This acquisition does not preclude share buybacks, and we remain committed to the payment of quarterly dividends. When timing and conditions are right, we still intend to repurchase shares both opportunistically and systematically in order to offset the issuance of shares to the Hymer Family.

 

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2. With Thor operating in such a decentralized manner, how will the Company expect to achieve synergies? Can you quantify the level of synergies you expect to achieve?

 

a. EHG has recently embarked on a cost savings plan based on their own centralization of key purchasing and production activities that is currently underway but at an early stage. In addition to their own identified cost synergies, we believe we can assist EHG in its efforts as they centralize their formerly decentralized model into a more cohesive structure and provide insight into areas of additional cost savings.

 

b. As we embark on our integration efforts, we will provide additional details regarding the quantification of the numerous synergy opportunities presented by this acquisition. We anticipate having various team members on site in Germany immediately and will begin working with the entire EHG management team across disciplines starting this week. Among the areas with the greatest opportunities are:

 

· Engineering and product design
· Technology and R&D
· Dealer development and distribution
· Supply chain strategies
· Implementation of targeted assembly automation on a broader scale
· Working capital management
· Sharing of best practices – EHG can provide great insights into technology, product development and operational efficiency, while Thor can provide insights on greater product speed to market and responsive product development

 

c. We believe there will be additional upside from expanding the distribution of EHG products into North America as well.

 

d. We have a proven track record of generating cost savings and operational improvements from acquisitions, including our most recent, Jayco. We believe the opportunities presented by EHG are even greater given the ability to combine the best practices of two geographically diverse markets.

 

3. What is your estimate for additional transaction-related expenses for the remainder of fiscal 2019?

 

a. Costs relating to the acquisition will be included in Thor’s 2019 quarterly financial results. Specific estimates of the dollar values of these costs are not yet available for the second quarter, however the costs will be comprised of the following categories, among others:

 

  2  

 

· Mark-to-market loss on the foreign currency forward contract. The foreign currency forward contract was used to lock in an exchange rate at the September 2018 announcement date, will be adjusted to market value at the end of the second quarter and will be closed out with any remaining gain or loss recognized in Thor’s third-quarter results.
· Transaction-related costs for legal, professional and advisory fees related to financial due diligence, preliminary implementation costs and regulatory review costs.
· Interest expense (including ticking fee) charges

 

b. Transaction-related costs, including professional, legal and advisory fees related to closing of the transaction as well as the integration and implementation of enhanced controls consistent with SOX requirements plus the expensing of capitalized fees related to the prior Thor debt facility, are expected to be in the range of $40 million to $55 million for the 9-month period subsequent to our first quarter which ended on October 31, 2018. This estimate excludes any loss on the foreign currency forward contract, purchase accounting adjustments and future interest charges.

 

4. Are current warranties on Erwin Hymer Group North America products an obligation of EHG? Are warranties of units sold after acquisition a liability of EHG?

 

a. No, and no. EHG will not assume any operating liabilities, general creditor obligations or any other type of liability, including warranty, related to the North American businesses. Existing contractual obligations of EHG consist of a handful of items that had been specifically guaranteed by EHG to third parties.

 

5. Is the European market a growth market similar to the U.S.? Are the same demographic trends driving growth? Are new buyers entering the market at the lower price points?

 

a. Industry research suggests that the European RV market is expected to grow at a 5.5% CAGR (in unit volume) from 2017-2022 assuming comparable macroeconomic conditions as exists today compared to flat to slightly downward growth in the U.S.

 

b. In general, Europeans have more holiday time off than do Americans. A study by Llewellyn Consulting and Glassdoor cites paid leave in the EU to be set at a minimum of four weeks per year, exclusive of bank holidays, but also indicates that Sweden, France, and Denmark average the equivalent of 5 weeks.

 

c. Demographically, the number of Europeans over the age of 55 is expected to grow 30% by the year 2040, outpacing the 3% growth in overall population predicted over the same time frame.

 

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d. As in the U.S., younger buyers ranging from 30 to 50 years old are entering the European market and are also the largest new demographic group purchasing campervans.

 

e. Historically low southern European country registrations provide significant opportunity for sales growth across the continent. This is another attractive near-term tailwind for the European RV market.

 

6. How have the economic cycles in Europe impacted RV customers? Is the trend line similar to the U.S.? How different are the two markets?

 

a. Similar to the U.S., the European RV industry was affected by the economic cycle where registrations declined during the 2007 downturn, but then have experienced robust growth since the resolution of the European debt crisis in 2014. Despite these years of growth, full-year 2017 levels are still below their historical peak (2006).

 

 

 

b. The European RV market is characterized by the long-term evolution from caravans to motorhomes (both motorcaravans and campervans), which generally have a higher price point. The share of motorhomes in new vehicle registrations has grown from 20% in 1989 to 60% in 2017.

 

 

c. Key drivers of European market growth include an expected moderate growth in consumer spend, an overall healthy economic outlook, growth in the target population of over 45 years old and favorable shifts in holiday activities towards the RV lifestyle.

 

 

d. The trend is expected to remain positive, fueled by an overall healthy economic outlook and a continued growing interest in the RV lifestyle. Leisure activities are the single largest discretionary spending item by European consumers, and RV purchases are directly correlated to changes in consumer spending.

 

7. How do the works councils compare to labor unions in the U.S.?

 

a. While works councils and labor unions are similar in that they represent a group of employees, the key difference is the main purpose of works councils is to create a clear line of communication between management and employees. Works councils have information, consultation and co-decision rights in the area of hiring, positioning and dismissals, internal organization of the business, restructuring and personal planning, among others. However, unlike US labor unions, works councils do not have the authority to call for any industrial action (i.e. strike). There is a legal principle of trustful cooperation between works councils and management.

 

b. Works councils form shop agreements, which regulate the affairs of the business. Trade unions use collective bargaining agreements to regulate working time and wage implications. While shop agreements may have cost implications, the main focus of these agreements is to improve an understanding between employees and management on the rules and policies necessary to run the business; again, the key focus is communication, while benefits and wages, which have cost implications, are more the focus for labor unions.

 

  4  

 

8. Which markets do you consider to be the biggest growth opportunities over the next few years for EHG?

 

a. In terms of economic development, it is expected that central European countries will show the highest growth rate. Beside these countries, EHG also has market share opportunities in a growing German market, the U.K., southern Europe and in Scandinavia.

 

b. Outside Europe, EHG has market potential in North America and China.

 

9. What is EHG’s presence in China? What was the rationale for their joint venture?

 

a. EHG currently sells locally produced towables in China through its joint venture Luoyang Erwin Hymer Loncen Caravan Co. LTD. Currently, EHG does not export European products into the Chinese market due to homologation issues.

 

b. We see China as the market with the most potential in the long term as it has a significant population with a growing number of people becoming interested in recreation and RVs.

 

c. The government is focusing on the leisure industry and currently is subsidizing the development of campsites (for the second time in the official 5-year plan). In the meantime, fairs and exhibitions are being organized (2 major events include the China Beijing International and All-In Caravanning) and the first local RV manufacturer has recently started production.

 

d. In China, RVing is a new phenomenon, and is seen as a way to vacation out of the cities. Within China, RVing is already competing with other holiday and travel opportunities (flying, cruise ships, etc.).

 

10. How did EHG perform financially during the financial crisis and during the European debt crisis?

 

a. During the financial crisis of 2008-09, EHG revenues fell from €1.3 billion in FY07 to €925 million in FY09. Since the financial crisis, EHG has remained profitable every year, including the period of the European debt crisis in 2012-14.

 

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11. How do your product lines differ? How are they similar? Are there opportunities to bring product innovations between the two companies immediately?

 

a. Both companies offer a broad product portfolio through a number of complimentary brands and models across product types and price points. The product portfolios are also geographically diverse.

 

b. The comprehensive variety of brands and pricing points is a key success factor to addressing the large number of customer segments, different regional preferences and the ability to serve a broad dealer network.

 

c. EHG has a greater portion of its product mix in the motorized segment with approximately 85% motorized and 15% towable, whereas Thor legacy product mix is 74% towable and 26% motorized.

 

d. We believe there are both near-term and long-term opportunities to capitalize upon the product offerings, designs and features of EHG and the legacy Thor brands that will benefit the consumers of each geographic area.

 

12. What differentiates EHG from its European competitors?

 

a. EHG is a market leader in terms of revenues generated in the European market.

 

b. EHG sells a significantly higher share of vehicles in the premium price segment than its competitors and has the largest dealer network in key European markets.

 

c. EHG enjoys a reputation for superior quality and innovation capabilities compared to its main competitors in its key markets.

 

d. EHG has a very strong dealer network, especially in Germany which is the largest European market.

 

13. How quickly does management plan to pay down the debt associated with the transaction? What is Thor’s capital allocation plan?

 

a. The combined company is expected to generate significant cash flow that will facilitate rapid debt and leverage reduction.

 

b. This expectation is well aligned with our balanced approach to capital allocation. We intend to make the paydown of the debt a top priority, similar to the debt incurred in connection with the Jayco acquisition. At the same time, we will continue to balance investments in organic growth opportunities, the return of capital to shareholders through dividend growth and opportunistic repurchases of shares of our stock. When the time is right, we will also pursue investments in other growth opportunities.

 

  6  

 

14. In case of economic slowdown, will you have the appropriate liquidity or source of incremental funding?

 

a. We have put in place a $750 million asset-based revolving credit facility and have a sizeable amount of cash on our balance sheet that will provide us the liquidity and flexibility we need to manage through cycles.

 

15. Are you concerned you may be making a significant investment (and incurring sizable debt) at the potential end of the economic/RV cycle?

 

a. We do not believe we are at the end of an economic cycle. Looking ahead, exposure across geographic markets will diversify macroeconomic cyclicality and give Thor access to the underpenetrated European market, which is still below the pre-crisis market size and has therefore potential for further growth. In addition, both businesses have a flexible cost structure that will allow the combined entity to react quickly, if needed, during changing economic conditions.

 

16. Are you currently staffed to operate as an international organization?

 

a. Thor intends to leverage the skills and positions of key existing EHG management in order to ensure that there is no operational disruption in the business.

 

b. From a corporate perspective, Thor has added a number of targeted personnel, and has also redeployed team members to new responsibilities over the past year, many of whom have extensive international or other directly relevant experience, in order to enhance synergy results.

 

c. Thor has a significant internal compliance function and has engaged the appropriate external advisers to ensure that the integration process proceeds smoothly. By taking a proactive stance on this front, we have developed an effective integration plan which is already underway.

 

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