Private-equity firm Monomoy Capital Partners offered to buy LCI Industries for $101 a share in cash, an unsolicited approach that puts a rival price on the table just as LCI shareholders weigh a pending all-stock merger with Patrick Industries Inc.
LCI, the Elkhart, Ind., parent of recreational-vehicle and marine components supplier Lippert, disclosed the nonbinding proposal Wednesday. The company said its board continues to recommend the Patrick transaction but has a duty to evaluate the Monomoy offer and will report back to shareholders. It advised investors to take no action for now. Perella Weinberg Partners is LCI’s financial adviser and Kirkland & Ellis is its legal counsel.
A deal already in front of shareholders
LCI and Patrick, also based in Elkhart, agreed on June 30 to combine in an all-stock merger that would create one of the largest suppliers of components to RV, manufactured-housing, marine and transportation manufacturers. The Securities and Exchange Commission declared the merger registration effective on Oct. 19, and the companies began mailing the joint proxy statement to shareholders that day, setting up votes on the deal.
Patrick responded the same morning by reaffirming its commitment to the merger. It said LCI had notified it of the proposal and that it would monitor developments while continuing to run its business.
Cash versus stock
The contest pits a cash price against shares in a combined company whose value depends on synergies and the health of the RV market, which has been through a lengthy downturn after a pandemic-era boom. LCI’s stock rallied after the bid was disclosed. A cash offer gives LCI holders a fixed number to compare against the Patrick exchange ratio, and it raises the possibility that Patrick will need to improve its terms or that other bidders will surface.
Monomoy, a New York-based buyout firm focused on industrial and consumer companies, has not disclosed how it would finance a takeover. Any switch away from Patrick would also require LCI to deal with the termination provisions in the existing merger agreement.
