Budget Group Closes Acquisition of Cruise America
29 January 1998
Budget Group Closes Acquisition of Cruise America
-- Merger Leverages Synergies Among Budget Group Subsidiaries --
LISLE, Ill., Jan. 29 -- Budget Group, Inc. , owner
of Budget Rent a Car, the world's third largest car and truck rental company,
completed its acquisition of Arizona-based Cruise America, Inc. (AMEX: RVR) on
January 28, 1998 in a stock-for-stock merger. The merger was approved by the
shareholders of Cruise America at a special shareholders' meeting held on
January 28, 1998. Cruise America is one of the largest North American
companies specializing primarily in the rental and sale of recreational
vehicles.
As a result of the merger, Cruise America shareholders are entitled to
receive 0.28073 of a share of Budget Group Class A common stock for each share
of Cruise America, or a total of 1.77 million shares of Budget Group Class A
common stock worth approximately $62 million. In addition, Budget Group
assumed $76 million of vehicle debt.
"The merger with Cruise America fits well with Budget Group's strategy to
build a network of transportation-related companies," states Sandy Miller,
chairman and CEO of Budget Group. "The addition of Cruise America is expected
to effectively complement and enhance our existing rental and sales
operations, enable Budget to reduce Cruise America's fleet financing costs
through greater economies of scale and afford us the opportunity to capitalize
on a well-established and growing base of inbound of European leisure
travelers."
Miller continues, "To fully leverage the synergies between Cruise America
and Budget Group's subsidiaries, we plan to cross-promote our products,
broaden each company's product offerings, conduct joint marketing programs and
cascade trucks from Cruise America to Budget Truck Rental."
Cruise America, which had revenues of $95.6 million and pretax income of
$3.8 million for its fiscal year ended April 30, 1997, operates a network of
17 company-owned facilities and 74 satellite rental centers throughout North
America, with a combined fleet of more then 4,300 recreational vehicles,
including motor homes, truck campers, motorcycles, and shuttle buses. With
locations strategically situated near national parks and other scenic
destinations across the U.S., Canada and Alaska, Cruise America caters largely
to a clientele of North American and European vacationers with an affinity for
recreational travel.
In recent years, Cruise America has significantly lowered its costs by
switching its motor home fleet from single-bodied units to modular units.
This modular approach allows Cruise America to refurbish the camper portion of
these vehicles and remount them on new RV truck chassis. The used truck
chassis are currently converted at a nominal cost into delivery trucks and
then sold at attractive prices into the large market for pre-owned trucks.
"On behalf of the Cruise America family, we are excited to be a part of
the Budget team, and we look forward to the many opportunities ahead,"
comments Randall Smalley, president of Cruise America. "We have already begun
implementation of many of the synergies available and have begun the process
of integrating compatible operations, including the completion of a prototype
of the first truck that will be 'cascaded' into Budget Truck rental
operations."
Budget Group, Inc., through subsidiary companies and their franchisees,
operates Budget Car and Truck Rental, the third largest worldwide car and
truck rental system, with over 3,200 airport and local market locations in
more than 120 countries and territories. In addition, Budget owns Premier Car
Rental, which serves the insurance replacement market through a network of 150
locations in 16 major U.S. markets, and Budget Car Sales, one of the largest
independent retailers of late model vehicles in the United States, which
operates 26 retail car sales facilities. Budget also owns Van Pool Services,
Inc., which leases vans for van pooling operations in 28 states, and Budget
Airport Parking, which operates airport parking facilities at certain
locations.
Cruise America, Inc. believes that it is one of the largest companies in
North America specializing in the rental and sale of recreational vehicles,
including motor homes, truck campers, motorcycles and shuttle buses. Prior to
the merger, Cruise America's common stock traded on the American Stock
Exchange under the ticker symbol "RVR."
Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 and as such may involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of Budget or Cruise America to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements speak only as of
the date of this press release. Budget and Cruise America expressly disclaim
any obligation or undertaking to release publicly any updates or revisions to
any forward-looking statements contained herein to reflect any change in
Budget's or Cruise America's expectations with regard thereto or any change in
events, conditions or circumstances on which any statement is based.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy Budget Class A common stock nor shall there be
any sale of these securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such state.
SOURCE Budget Group, Inc.