REV Group, a manufacturer of specialty vehicle brands, has recently finalized the sale of its transit bus business, ElDorado National (California), Inc. (ENC), to Rivaz for a sum of $52 million. This strategic move is part of REV Group’s efforts to optimize its product portfolio and balance sheet.
Mark Skonieczny, the President and CEO of REV Group, expressed his satisfaction with the transaction, stating, “ENC boasts a rich history spanning five decades in the mass transit industry, and we are pleased that the brand will continue under Rivaz. I extend my gratitude to our customers, as well as the employees and dealers of ENC, for their support during this transitional period.”
The net proceeds generated from the sale will be utilized by REV Group to reduce its outstanding borrowings under the company’s ABL credit facility. This divestiture follows another significant transaction earlier this year, where REV Group sold its school bus business, Collins, to Forest River Bus for a substantial amount of $303 million in cash.
In reflecting on the decision to divest ENC, Skonieczny highlighted the challenges faced by the company, such as delays in the supply chain for critical components and infrastructure development for electric vehicle adoption. These factors, coupled with the financial stability of key suppliers, created a highly competitive environment for diesel and CNG buses, making it difficult for ENC to compete profitably against larger peers.
As a result of the sale, REV Group’s remaining Commercial segment business will be merged with the Fire & Emergency businesses to form a new segment known as Specialty Vehicles. Additionally, the Recreation segment will undergo rebranding as Recreational Vehicles, aligning with the company’s revised product portfolio strategy.
Overall, the sale of ENC marks a strategic shift for REV Group as it continues to streamline its operations, enhance its financial position, and focus on core business areas. The company’s commitment to adapting to market dynamics and optimizing its product offerings underscores its dedication to long-term success in the specialty vehicle industry.
