Tourism Holdings to merge with Australia's Apollo to create a stronger global campervan group

Friday, 10 December 2021

Combining the two campervan companies would create a stronger group which can better handle Covid-19 disruptions.

Tourism Holdings plans to merge with its Australian counterpart Apollo Tourism and Leisure, to create a larger global campervan company that can better cope with disruptions from the Covid-19 pandemic.

The deal, announced on Friday, would see Tourism Holdings own 75 per cent of the merged company, with Apollo shareholders holding the remaining 25 per cent.

The Covid-19 pandemic has been tough on campervan rental companies who rely on international tourists for most of their business, with Tourism Holdings previously describing it as the biggest single challenge in its history. Combining the two businesses would enable them to reduce their fleets, pay down debt and operate more efficiently together.

“Tourism Holdings 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,” said Tourism Holdings chairman Rob Campbell.

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

The merged company would combine their businesses in New Zealand, Australia, North America, the United Kingdom and Europe.

They expect to be able to reduce their combined fleet by as many as 1250 vehicles, and pay down about $40 million of debt. The combined business is expected to deliver a pre-tax benefit to profits of between $17m to $19m a year.

The merger would pave the way for Tourism Holdings to dual list on the ASX, and for Apollo’s Australian investors to have a stake in NZX-listed Tourism Holdings.

The deal requires regulatory and shareholder approvals, which is expected to take until at least the start of the second quarter of 2022.

Separately, Tourism Holdings said it expected to post a net loss of between $4m and $7m in the first half of its financial year, including about $2m of transaction costs related to the Apollo merger.

The outlook for the second half of the year remained uncertain, although it was expected to be up on the previous year as travel restrictions eased and the company capitalised on strong vehicle sales demand, Campbell said.

Shares in Tourism Holdings rose 2.8 per cent to $2.93.