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Winnebago Acquires Lithionics Batteries


BBL

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Hello all,

As you know, Lithionics is the brand of choice for lithium batteries for OTT factory orders.  It was recently announced that Winnebago has acquired Lithionics primarily to address issues in their supply chain.  Click HERE to read about the acquisition.

I guess the question to ask is, if this is to primarily solve Winnebago’s battery supply chain issues, are these batteries going to be more difficult to acquire by other brands?

I am very pleased with Lithionics, some of the best RV’s, Boats, and Homes use them and they have a great customer service model.

What are YOUR thoughts on the topic?

Brian

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We look at the press release for WHY and HOW phrases:

Winnebago is likely pitching this to the board and investors as something that not only Pays for Itself, but is an accretive move that generates incremental revenues and strengthens Winnebago's market position for the future.

What type of acquisition is this:

1) Technology Boost for Winnebago Engineering
2) Secure the critical technology as a supply chain vertical integration move.

WHY  Statement from Press Release: 

"The addition of Lithionics will provide Winnebago Industries with enhanced technological and engineering capabilities to offer consumers more differentiated products with innovative electrical solutions, as well as bring strategic sourcing benefits and secure a critical area of its supply chain. "

HOW will this be integrated and paid for in the long run from press release:

A key phrase is:   "Lithionics will operate as a wholly owned subsidiary of Winnebago Industries."

Unwinding that means that Winnebago's business strategy likely had several elements at play:

1) Supply Chain Stability ...the current sagging sales in the industry could take out one of their key small but strategic suppliers.
    Often it's way cheaper to acquire a private company with key technology than to invest to build it yourself or seek a replacement supplier.


2) Existing revenue from OEM sales by Lithionics is immediately accretive to Winnebago.  It makes their overall $ revenue higher
This new revenue helps Winnebago 
offset the acquisition cost.

3) Strong signs that the eRV market along with auxiliary device market which require high quality batteries exist and is growing fast.  Winnebago has tagged this the eRV2 market. They've got several cool prototypes running now. They all feature an all electric van chassis for driving...and of course Lithionics for the house batteries.


This is an opportunity for Winnebago to capture a new segment of the OEM High Energy Density Battery market.  ( If Winnebago was facing a BUILD NEW CAPABILITY or BUY OUR WAY IN  decision ...this one clearly came out BUY.) 

All 3 of these strategic elements have immediate and lasting value to Winnebago.

Result:   A guess on how things will play out....

Short term - 1 YEAR
Lithionics will be left to run the show as is for at least a year as Winnebago figures out how work with Lithionics management to segment the market, and then define  Winnebago In House Brands  vs. Ongoing Lithionics external brand.

The longer term goal would be to create differentiated branded offerings in the market and continue to support and sell to other RV and Trailer Manufactures who can't afford to invent new battery technology.

This could play out as an exceedingly good strategic move by Winnebago.

Look at the 14:20 second point on the video below for Steve from Lithionics describing the new battery and charging system they designed "for Winnebago" as a proprietary design.

 

image.thumb.png.e6cdf1ca3db4371306095e54f263078e.png

 

 

 

 

 

 

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28 minutes ago, Galway Girl said:

A key phrase is:   "Lithionics will operate as a wholly owned subsidiary of Winnebago Industries."

Very nice summation of the acquisition process.  Strategic sourcing is a valuable part of this decision.  Many lithium batteries are coming from overseas and this will help them as an on-shore source as well as the valuation of the company.

That being said, just because Lithionics will operate as a wholly owned subsidiary, doesn’t mean Winnebago won’t have priority in terms of delivery commitments.

These M&A’s (mergers and acquisitions) are happening all across the RV segment.  Even some of the suppliers, like Dometic, are acquiring any company that shows promise in their particular line of business.

All very interesting to watch from the sidelines.

Regards and again, thank you for the insight your provided.

Brian

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4 hours ago, Brian and Brandelyne said:

That being said, just because Lithionics will operate as a wholly owned subsidiary, doesn’t mean Winnebago won’t have priority in terms of delivery commitments.

Spot on.  Impact during difficult times will be that OTT and other OEM's will be scouting for batteries and the price for their product will be higher than Winnebago's making the Winnebago travel trailers/campers less expensive by comparison.  Would behoove OTT to set up a preferred supplier with companies like Battleborn and Victron.   

GJ

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Winnebago, as I  remember,  was the first to use Lithionics, so a friendly partnership makes perfect  sense.

I'd relax on the hand-wringing, at least for now. Aquisitions happen all the time in rv component world.

Me? I'm super happy lithionics was acquired by a friendly and  supportive,  smaller  company, vs dometic or lippert.

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400 watts solar. DC compressor fridge. No inverter. 2 x 105 ah agm batteries .  Life is good.


        
 

 

 

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10 hours ago, SeaDawg said:

I'd relax on the hand-wringing, at least for now. Aquisitions happen all the time in rv component world.

I know you meant this in a positive and supportive way, however, I don’t think people are doing that. We are just discussing how these M&A’s are happening all over the RV industry and how it “may” impact one company to another.  OTT has their own relationships to manage and I would not suppose to tell them how to manage them.

Just having some healthy dialog around a growing phenomenon.

In my opinion, Lithionics is one of the better choices out there today. I am very impressed with them so far. They even invited us to tour the plant when we are in FL this fall.

Thank you for the support.

Brian

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19 hours ago, Brian and Brandelyne said:

What are YOUR thoughts on the topic?

Short term, Lithionics' stellar level of customer service will be unchanged. 

During my 35 years of law practice, I represented many senior execs when their smaller company was acquired by a "big fish."  Long term, expect Winnebago management to impose their corporate culture on Lithionics, which usually results in senior management turnover at Lithionics.  And, relevant to those of us who own Lithionics batteries, one usual, eventual, casualty of acquisition is reduction of customer service staff to cut costs and improve the bottom line for the parent company. 

Do not be surprised if, in a year or two, when you call Lithionics instead of a real person answering the phone, you get one of those hold messages stating:  " We are experiencing an extremely high call volume.  Thank you for your patience."  

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53 minutes ago, Rivernerd said:

Do not be surprised

Amen.  That's the corporate world I'm familiar with...

Charlie.

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Probably important to note that Winnebago and Oliver are not the only customers of Lithionics.  They've been installed over a wide range of applications, by a number of distributors. 

I think Winnebago was, of course, smart, but I'll wait and see what disadvantages, if any, appear.  (Especially since winnebago is looking at and developing an erv) . https://www.caranddriver.com/news/a38803078/winnebago-electric-camper-van-photos-info/

I look at the acquisition as a friendly step up for both.  And, with an established network, another profit center for both.

Winnebago (Iowa) is an old and  well respected company, and again, I'm glad to see a symbiotic partnership outside the ginormous Dometic and Lippert networks.

I'm in wait and see mode. 

Lithionics hq is only a short drive from me, in Florida.

https://winnebago.gcs-web.com/news-releases/news-release-details/winnebago-industries-acquire-premier-lithium-ion-battery

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2008 Ram 1500 4 × 4

2008 Oliver Elite, Hull #12

Florida and Western North Carolina, or wherever the truck goes....

400 watts solar. DC compressor fridge. No inverter. 2 x 105 ah agm batteries .  Life is good.


        
 

 

 

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It's also interesting that Thor's Airstream brand is installing Battleborn Gamechanger 3.0 and Victron products in some of their offerings.  The RV/Boat energy market is getting more and more competitive.

Charlie.

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Arizona | 2020 Oliver Elite II Twin bed Hull #617 | 2021 Ram 1500 e-Hemi 4x4

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Acquisition has been completed.

https://rvldealernews.com/winnebago-industries-completes-acquisition-of-lithionics-battery/

"We look forward to working together to expand the use of Lithionics’ efficient energy solutions within our own portfolio, as well as supporting Lithionics in growing relationships with its existing customers and exploring new market applications for its premier battery solutions.”

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2008 Ram 1500 4 × 4

2008 Oliver Elite, Hull #12

Florida and Western North Carolina, or wherever the truck goes....

400 watts solar. DC compressor fridge. No inverter. 2 x 105 ah agm batteries .  Life is good.


        
 

 

 

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2 hours ago, SeaDawg said:

Acquisition has been completed.

https://rvldealernews.com/winnebago-industries-completes-acquisition-of-lithionics-battery/

"We look forward to working together to expand the use of Lithionics’ efficient energy solutions within our own portfolio, as well as supporting Lithionics in growing relationships with its existing customers and exploring new market applications for its premier battery solutions.”

That sounds very positive. Looking forward to their presentation at the rally. 

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Winnebago may give Lithionics access to much needed capital for future expansion.

 

Lithionics is a tiny little fish in the big pond of Li battery makers.

 

 

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