Merger to create ‘resilient business’

Tourism Holdings Ltd (THL) is eyeing a “faster recovery” from the effects of the Covid-19 pandemic after agreeing a merger with Australian company Apollo Tourism & Leisure Ltd.

Apollo has operations in Australia, New Zealand, North America, Europe and the UK, and manufactures, rents, sells and distributes motorhomes, campervans and caravans on a smaller scale to THL.

The merger, subject to regulatory approvals on both sides of the Tasman, will see THL acquire Apollo using shares. 

Once the deal is completed, ATL shareholders will own about 25 per cent and THL shareholders own approximately 75 per cent of THL.

THL will also apply to be dual-listed on the Australian Securities Exchange (ASX) through a foreign-exempt listing.

Bosses expect the merger will deliver a steady-state earnings before interest and tax (EBIT) benefit of between $17 million and $19m per annum. Fleet rationalisation is also set to generate more than $40m of net debt benefit.

Rob Campbell, pictured, THL chairman, says: “THL is proactively moving to build a more resilient business and expand its international reach, rather than seeking to wait out market uncertainty from the pandemic.

“We’re able to make this move thanks to our prudent balance sheet management through the pandemic period.

“Importantly, this merger assists both entities to better manage market uncertainty over the next phase, due to compelling cost synergies now and greater fleet efficiency in future years. 

“By realising significant cost synergies, the merged business will be better positioned to face a longer than expected recovery period, should that eventuate.”

Grant Webster, chief executive, adds that the synergies available from merging with Apollo “are compelling”.

“Being able to deliver value uplift for shareholders of both companies, while creating a more resilient business in terms of navigating our next phase and competing more effectively on the world stage is a very significant step for us,” he explains.

“This takes THL into more markets, as a global commercial RV rental leader with businesses in Canada and the US, Europe and the UK as well as our Australasian operations, supported by strong manufacturing capability and retail vehicle sales in Australia and New Zealand.” 

Webster says the shareholder and regulatory approvals will likely take until at least the start of the second quarter of 2022.