Private equity investment continues to gain traction in the RV industry, according to Matrix Capital Markets Group Managing Director William O’Flaherty. He said primary interest is focused on suppliers and distributors seeking capital and operational support to expand. That interest also extends to providers of aftermarket parts or services.
O’Flaherty said RV dealers and original equipment manufacturers can sometimes present unique challenges that make those companies less attractive for private equity investment, although within each of these market segments, investment alternatives exist.
“Suppliers and distributors really possess a number of the business characteristics that private equity looks for,” O’Flaherty said. “We see a lot of businesses in the RV market that are in the $10 million to $100 million revenue range. That’s an ideal range for private equity, as those size businesses tend to be at an inflection point. They can help elevate an organization and create efficiencies.”
Some examples include Camco, a portfolio company of The Jordan Company; Covercraft, which is owned by Audax Private Equity; and Thetford, which is owned by Monomoy Capital Partners.
O’Flaherty said some people may see private equity as focused on cost-cutting. He said the real goal is to improve operations, scale efficiently and generate growth. He noted that private-equity firms can bring deep operational experience, capital resources and merger-and-acquisition expertise to help business owners achieve goals.
For owners of privately held suppliers, O’Flaherty said there are two common situations where engaging private equity makes sense. The first is when an owner wants to “take some chips off the table” after years of growth. The second is when the company needs strategic or financial support to reach the next expansion stage.
“Many founders have built incredible businesses, but their personal wealth is tied up in the company,” O’Flaherty said. “Private equity can allow them to diversify and bring in a partner that knows how to scale, whether that is expanding sales, upgrading systems or pursuing acquisitions.”
He added that private-equity firms can also be valuable partners for family-owned businesses navigating generational transitions.
“If an owner wants to retire but keep the company’s culture and management team intact,” O’Flaherty said, “private equity can provide liquidity while empowering the next generation to continue running the business.”
According to O’Flaherty, some things make businesses less attractive to investors. He said high customer or supplier concentration, overreliance on a single leader nearing retirement or stagnant growth prospects can deter interest.
“Private equity is looking for stability and growth,” he said. “They tend to avoid businesses that can be less predictable or don’t have meaningful avenues for future growth. They want to partner with businesses they can supercharge with capital, with acquisitions, with new leadership incentives.”
He said that companies above $15 million to $20 million in annual sales tend to draw more attention because they have a proven track record. The size of these businesses also allow private equity firms to invest sufficient capital to justify bringing the resources and support that can make them such valuable partners.
O’Flaherty said the private equity transaction process is like running a marathon in that preparation is key. Deals typically take five to six months. They begin with extensive planning that includes financial reviews, marketing materials and identifying prospective buyers. Multiple bidding rounds then follow.
O’Flaherty said private equity firms often create incentive programs for key managers, granting them ownership stakes that do not require a cash investment.
“It gives rising leaders a real sense of ownership,” he said. “That alignment of incentives can change behavior and drive better performance across the board.”
As RV supply chain consolidation continues, O’Flaherty expects private equity’s role to keep expanding.
“Private equity is really about partnership,” he said. “It works best when an owner still has a runway and wants to keep shaping the company’s destiny, just with a stronger financial and strategic partner behind them.”
