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- Apollo Tourism (ATL) and NZX listed, Tourism Holdings (THL) are set to join forces to expand global recreational vehicle (RVs) networks
- Under a proposed merger the companies plan to establish a diversified travel company across Australia, New Zealand, North America, the United Kingdom and Europe
- Apollo says the combined group will provide the financial strength to emerge faster from COVID-19
- The arrangement will see ATL shareholders receive one fully paid ordinary share in THL, for every 3.68 shares in Apollo held at the scheme record date
- Apollo shares were in the green, up 23.4 per cent to 68.5 cents at 10:55 am AEDT
Apollo Tourism (ATL) and Tourism Holdings (THL) are set to join forces to expand global recreational vehicle (RVs) networks.
Apollo is a multi-national, vertically integrated manufacturer, rental fleet operator, wholesaler and retailer of a range of RVs including motorhomes, camper-vans and caravans.
THL is a New Zealand stock exchange listed company that is reportedly the largest provider of holiday vehicles for rent and sale globally.
The companies have entered into a scheme implementation deed, under which a proposed merger has been agreed upon, to establish a diversified travel company across Australia, New Zealand, North America, the United Kingdom and Europe.
The deal follows a string of COVID-19 related challenges which impacted ATL’s financial year 2021. While the company expects results will have improved year-on-year, an underlying loss is still anticipated in FY22.
Apollo said the proposed transaction will provide the combined group with the financial strength to emerge faster from COVID-19 and to take advantage of near-term growth opportunities as borders reopen and cross-border tourism ramps up.
Additionally, the company board believes the merger will accelerate the timeframe to re-establish normalised earnings and recommence the payment of dividends more quickly than Apollo on a standalone basis.
Moreover, the due diligence process reportedly identified synergies expected to deliver steady-state earnings before interest and taxes uplift of between $16.2 million and $18.1 million per annum.
The combined group expects to be able to service rental operations with a smaller, more optimised fleet, which could result in a fleet rationalisation of up to around 1250 vehicles.
From this rationalisation, the companies could attain a one-off debt reduction of roughly $38 million, with a further $28.5 million one-off debt reduction subject to the execution of operational efficiency improvements.
Through the proposed merger ATL shareholders will receive one fully paid ordinary share in THL, for every 3.68 fully paid ordinary shares in Apollo held at the scheme record date.
As part of the transaction, THL has agreed to apply for a foreign exempt listing on the ASX, with approval for such listing a condition precedent of the proposed transaction.
If the transaction is implemented, Apollo shareholders will own 25 per cent of THL shares on issue.
Subject to a number of conditions, it is anticipated that the proposed transaction will complete prior to the end of the financial year 2022.
Apollo shares were in the green, up 23.4 per cent to 68.5 cents at 10:55 am AEDT.
