Eric Gomberg of Dane Capital Management presented his in-depth investment thesis on Andina/Lazydays (Nasdaq: ANDA) at Best Ideas 2018.

Andina/Lazydays is among the largest RV dealerships in the U.S. (~$600 million in 2017 revenue). The company is in the process of going public via a SPAC (fully backstopped with long-term investors). The valuation and economics of the deal are compelling. LazyDays is going public at 6.5x 2017 EBITDA, with a 10+% FCF yield, and has numerous companies under NDA to acquire at 2-3.5x EBITDA. LazyDays’ closest comp, Camping World (CWH) has seen multiple expansion from 7x to 12x EBITDA since an IPO in late 2016. Eric expects a combination of accretive M&A, geographic diversification, and multiple expansion to lead to meaningful share price appreciation. Given the fragmentation in the RV dealership industry (2,100+ dealers in the U.S.), there is a long runway for growth. Eric recently attended the National RV Convention, at which a panel discussed succession planning for RV dealers. There appear to be few viable exits, and LazyDays appears to be among the most attractive. LazyDays is an asset-light business, with capex at 1.1% of sales. The company should emerge from the going-public transaction with a clean balance sheet, with just 0.8x leverage, based on a $20 million term loan, which will likely be refinanced in the near term.

About the instructor:

Eric Gomberg founded Dane Capital Management in 2014. The firm is a private investment company that focuses on value and special situations investments.

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