Shares in Winnebago Industries Inc (NYSE:WGO) motored higher after it acquired towable recreational vehicle (RV) specialist, the Grand Design Recreational Vehicle Company.
Shares in the motorised RV maker rose 19% to US$27.99 in the first half hour of trading as it also topped expectations with its fiscal fourth quarter results.
Winnebago is paying US$395mln in cash and US$105mln in shares for Grand Design, acquiring the company from private equity group Summit Partners.
Grand Design had revenues of US$428mln last year. With Grand Design now in the fold, Winnebago’s annual revenues should clock in at about US$1.4bn.
Winnebago said the acquisition is expected to enhance earnings from the get-go.