LCI to Combine With Patrick in All-Stock Merger
The LCI board said the merger remains the best path to long-term value, citing about $150 million of expected net run-rate cost synergies.
LCI Industries (LCII) said its board determined that a merger with Patrick Industries (PATK) remains the best path toward long-term sustainable value creation, including approximately $150 million of net run-rate cost synergies expected within three years of closing and participation in the future growth prospects of a fundamentally stronger company.
The Elkhart, Indiana-based engineered-components supplier and the outdoor-enthusiast and housing component maker had signed a definitive agreement on June 30, 2026 to combine in an all-stock merger. Under that agreement, LCI shareholders will receive 1.2440 shares of Patrick common stock for each share of LCI common stock they own. Following completion, Patrick shareholders will own approximately 52% of the combined company and LCI shareholders approximately 48%.
The combination is framed as a merger of complementary product portfolios across the outdoor enthusiast, housing and transportation markets, with Andy Nemeth to serve as chief executive of the combined company, Todd Cleveland as chair and Johnny Sirpilla as vice chair of the combined board.
The latest update sits against a quarter in which Patrick’s net sales were $975 million, compared with $976 million a year earlier. Growth in Powersports of 30% and Marine of 14%, along with Housing revenue growth of 4%, nearly offset a 15% decrease in RV revenue. Operating income was $50 million, or a 5.1% operating margin, versus $66 million and 6.8% in the prior-year period. Adjusted operating margin, which excludes merger-related expenses, restructuring costs and other non-recurring items, was 6.8%, flat year over year.
Chief Executive Officer Andy Nemeth said strategic market diversification and the company’s business model continued to drive resilient results, with the team delivering consolidated net sales in line with the prior year despite lower RV revenue from a decline in RV industry wholesale unit shipments. President Jeff Rodino said markets remained dynamic with continued macroeconomic headwinds, including high interest rates, elevated fuel costs and inflation.
RV accounted for 37% of third-quarter revenue, with sales of $362 million. Marine was 18% of revenue at $171 million, outperforming an estimated 8% increase in wholesale powerboat industry unit shipments. Powersports was 13% of revenue at $128 million. Housing was 32% of revenue at $314 million.
Patrick’s registration statement on Form S-4 was declared effective by the SEC on October 19, 2026. The company will hold a special meeting of shareholders on November 18, 2026. Closing is expected in the first half of 2027, subject to approval by shareholders of both companies, required regulatory approvals, and other customary closing conditions.
On October 28, LCI confirmed it had received an unsolicited, non-binding proposal from Monomoy Capital Partners to acquire LCI for $101 a share in cash. The company said its existing merger agreement with Patrick remains in place and that the LCI board continues to recommend in favor of the Patrick transaction. Perella Weinberg Partners LP is serving as financial advisor and Kirkland & Ellis LLP as legal advisor to LCI.
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