THL
19/10/2012 16:04
MEETING
REL: 1604 HRS Tourism Holdings Limited
MEETING: THL: THL Media Release on Special Meeting 19 October 2012
19 October 2012
NZX & Media Release
FOR IMMEDIATE RELEASE
Tourism Holdings (thl) New Zealand rentals business merges
with United Campervans and KEA Campers
thl shareholders have today agreed to merge its New Zealand rentals business
with United Campervans and KEA Campers, creating a strong New Zealand tourism
advocate with the strength to prosper despite challenging tourism market
conditions.
At a special meeting of thl shareholders in Auckland this afternoon investors
voted overwhelmingly in favour of the resolution to acquire United and KEA
for cash and shares worth a total of $69.5 million.
Completion of the transaction is expected to occur on October 31st, 2012.
Shareholders also voted in favour of the appointment of United founder Kay
Howe to the thl board.
thl chairman Keith Smith said: "I am very pleased with the outcome of today's
special shareholder meeting. thl shareholders have set their company on the
road to a stronger future in these economically difficult times. Combined
with KEA and United, thl will have the people, brands and financial structure
to take our unforgettable New Zealand campervan holidays to the world.
We expect shareholders will share in these benefits with forecsted
improvements in thl group earnings flowing through to enhanced dividends.
Meanwhile I am also delighted on behalf of thl directors to welcome Kay Howe
to the thl board, initially as an executive director, and as a significant
shareholder in this great company.
Kay will assist with the integration team until sometime in February - March
2013. Kay's strong industry connections and enthusiasm will be welcomed to
the board and the thl group.
thl shareholders are also fortunate to be retaining the experience of KEA
Campers founder Grant Brady."
thl Chief Executive Grant Webster said:
"The board and management and the thl, United and KEA crew understand that
merger plans are nothing without excellent execution; that the successful
integration of these businesses will be the ultimate determinant of the
merger's success.
We understand that customer focus and service is critical during the
integration phase and beyond. We are committed to executing the integration
without compromising these critical features of our business and therefore no
frontline positions will be cut.
I look forward to discussing more about the brand strategy at the November
Annual Meeting and beyond as we develop the positioning of each part of the
business."
END
Notes to editors:
o The merger of thl's New Zealand rentals business, United and KEA is
structured as an acquisition of United and KEA's campervan and motorhome
fleets, their forward order books and certain non-fleet assets. It lifts
thl's assets to a total of $359 million. It required the approval of a simple
majority of shareholders as the value of the transaction represented more
than 50% of thl's average market capitalisation.
o thl has agreed to a total consideration of $69.5 million made up of: $7.4
million of thl shares issued at 61.9 cents (the volume weighted average price
of thl's share price over the last six months); a deferred contingent
consideration of $8 million linked to the realisation prices of the vendors
motorhome assets; $3.2 million cash and re-financing of the vendors' $50.9
million of external debt.
o The merger consideration represented a 10% or $7.0 million discount to the
assessed market value of Kea and United Assets.
o The merger is projected to be cash flow, earnings and dividend accretive
within the first two years due to increased fleet utilisation and on-going
cost synergies based on the use of thl's marketing, sales, finance,
reservations and information technology infrastructure.
o At acquisition, debt including the deferred consideration is projected to
rise to $158 million, increasing thl's gearing ratio (measured as debt to
debt plus equity) from 42% at the end of June 2012 to 50% at completion at
the end of October. But gearing is projected to quickly return to pre-merger
levels as the company pays a circa $56 million of debt in the first 20 months
of the transaction up to June 2014.
o thl United and KEA have committed to the assurances and contracts currently
in place in the market. These commitments extend as far as September 2014.
And to the product brands that exist today.
For further information contact:
Grant Webster
thl Chief Executive
Direct Dial: +64 9 336 4255
Mobile: +64 21 449 210
Ian Lewington
thl Chief Financial Officer
Direct Dial: +64 9 336 4212
Mobile: +64 21 952 254
About thl: (www.thlonline.com)
thl is New Zealand's premier tourism company. We are listed on the NZX and
are the largest provider of holiday vehicles for rent and sale in Australia
and New Zealand under the Maui, Britz, Mighty, KEA Australia, Motek Vehicle
Sales and (following completion of today's merger agreement) the United
Campervans and KEA Campers brands. In the USA we own and operate the Road
Bear RV Rentals & Sales brand. Within New Zealand we operate Kiwi Experience
and the Discover Waitomo Group which includes Waitomo Glowworm Caves, Ruakuri
Cave, Aranui Cave and The Legendary Black Water Rafting Co. In 2012 thl
entered in a joint venture to form RV Manufacturing Group LP, New Zealand's
largest campervan and specialist vehicle manufacturer based in Auckland and
Hamilton.
End CA:00228685 For:THL Type:MEETING Time:2012-10-19 16:04:00
