Recreational vehicle maker Monaco Coach Corp. is buying rival SMC Corp. and planning to expand SMC's fiberglass processing operation as part of its long-term plans.
The $36 million cash and debt-assumption buyout will make Coburg, Ore.-based Monaco the biggest producer of Class A, top-of-the-line RVs in North America.
``We see this as a great opportunity to grow our business,'' Kay L. Toolson, chairman and chief executive officer of Monaco, said in a June 26 conference call. ``We've had success with acquisitions in the past. They have some great management people.''
The purchase also should translate to more work for SMC's fiberglass subsidiary, Composite Technologies Inc. of Hines, Ore. The company employs 63 making RV sidewalls, floors, roofs, front and rear ends as well as countertops, shower enclosures and tubs for the coach interiors.
Monaco plans to leverage production through its entire line, potentially using CTI to produce components for all of its motor homes. The two companies combined sold more than 2,000 Class A RVs in the past year.
``We see opportunities for efficiency for all of our operations,'' Monaco President John Nepute said.
There is room for growth at Hines. SMC closed another manufacturing unit at the same site earlier this year, company spokesman Greg Vernon said. CTI takes up about half of the floor space.
``Right now, our plans are to expand the Composite Technology operation,'' Toolson said. ``We visited that site yesterday. They have a great work force, and they really want to work. They really want their jobs.
``We're committed to keeping that operation there and expanding it.''
Monaco has one ``limited'' fiberglass production unit, at a leased, 100,000-square-foot facility in Springfield, Ore. SMC owns the 169,300-square-foot building in Hines that houses CTI, Vernon said.
Monaco will pay $3.70 per share for SMC of Bend, Ore. The firm is publicly traded, but Chairman Mathew Perlot and Chief Executive Officer Curtis W. Lawler hold 70 percent of its stock. Both men already have signed on to the plan.
SMC stock closed at $3 on June 22, the day before the sale was announced.
The sale should wrap up within 30 days, Toolson said.
SMC produces RVs under the Beaver and Safari brand names. It posted sales of $190.7 million last year, down from $215 million in 1999, reflecting an overall 6.6 percent drop in RV sales in 2000.
Monaco, meanwhile, listed $901.8 million in sales, up from $780.8 million in 1999. It sells vehicles under the Monaco, Holiday Rambler and Royale Coach brand names.
