Southern RV Super Center, Inc.

Sale of assets to Main Street Capital Corporation, Inc.


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Project Description

The Transaction:
Carr, Riggs & Ingram Capital Advisors (CRI Capital Advisors) assisted the owners through the process as their sole investment banking advisor during the sale of assets of Southern RV Super Center, Inc. to Main Street Capital Corporation, Inc.,

The Company:
Southern RV was one of the largest dealers of new and used recreational vehicles in the Gulf Coast region of the United States, operating from multiple dealership locations in Louisiana and Texas. The company was consistently ranked at the top of its industry/peer group and had a strong reputation for fair pricing, professional staff, and services of its products beyond the sale. Southern RV was owned by Kenny Jenkins and Jim Hicks, long-time RV enthusiasts and businessmen who had a vision of creating a class-leading recreational vehicle sales organization. Kenny entered the partnership as the primary financial partner, while Jim served as both a financial and operational partner for the business.

The Objectives:
As the owners of Southern RV considered a potential path towards a transition out of ownership. Jim was essential to the day-to-day operations of the company, so it was clear that his continued involvement would be important. Although Jim was preparing for his retirement in the next five years, he was not ready to completely exit the business. When CRI Capital advisors were asked to consult, they identified three essential elements they believed would create a successful transition of ownership for Southern RV:

Exceptional valuation that was indicative of the company’s stellar reputation, strong financial history, and position for growth potential.

Identify a buyer that would achieve significant liquidity for both owners, but would allow Jim to remain heavily involved in the ongoing operations of the company for a few years following the sale.

Align with a financial and business partner that would enable Southern RV to continue along its growth path through acquisition and assist with the construction and expansion of additional dealerships in key locations.

The Outcome:
CRI Capital Advisors were able to advise the owners as they considered various options to help move the company forward after they liquidated their ownership. A thorough search of potential acquirers was conducted and after considering multiple offers, Main Street Capital was determined to be the ideal acquirer for Southern RV. Main Street Capital offered the target valuation and ultimate structure that provided immediate financial security for the owners of Southern RV. This offer also provided the opportunity for Jim to participate in, and benefit financially from, the company’s continued growth. Main Street brought sophisticated business practices and infrastructure to the mix, but afforded Jim broad latitude in business decisions regarding the growth of the company, including dealership acquisition and development. Both the buyer and seller worked closely together to drive profitable sales growth and prominence in the marketplace over the course of the next few years. When the company saw a rapid growth in profits, it was sought out and subsequently sold to another major RV dealership network. This

second sale afforded Jim full payment of all seller note amounts due and successfully secured his transition from business operations to retirement. Since he had maintained partial ownership in the company after the first sale, he not only profited during the first ownership transition, but his retained equity in Southern RV had greatly appreciated in value and generated a second significant liquidity event following its second sale.