Truck Camper Magazine interviews Jack Cole, Vice President of Lance Campers, on the details of the company’s acquisition by the REV Group and what it means to the future of the company, products, dealer network, and more.
REV Group announced the acquisition of Lance Campers on January 12, 2018. The news broke via press release leaving many open questions.
Specifically, we wanted to know why Lance Campers was sold, how Lance Campers and REV Group got together, why it was a good match, and what was in it for Lance Campers, Lance dealers, and Lance customers.
The response from fellow truck campers included questions about REV Group’s commitment to truck campers, the possibilities of expanded product lines, and the possible implications on warranty and product quality.
To address these questions and many more, we interviewed Jack Cole, Vice-President of Lance Campers.
Above: Tim Sullivan, President of REV Group/Lance Campers, with Jack Cole, Vice President of Lance Campers on the Lance Camper production line
TCM: Why did you decide to sell Lance Campers?
Jack: Jeff Souleles and I both knew we couldn’t run the company forever. I’m 68 and he’s 64.
Three years ago we started preparing the company for sale. The preparation boiled down to having audited financial statements for Lance Campers. Prior to this process, I didn’t feel we needed audited statements because Jeff and I were here every day and signed all the checks.
Our goal was to find a potential acquirer who was excited about our product line and brand. We wanted them to be as excited about Lance as much as we are. Jeff and I have managed Lance Campers for 53 years and want to see it go for at least another 53 years. We found a good partner in REV Group to accomplish that.
TCM: Tell us the story of how the REV Group acquisition came to be.
Jack: I got a phone call from REV Group’s President of Manufacturing. He asked me if we were interested in talking about selling the company and I told him that we would be glad to talk to them. It went from there. There were other interested companies who called about acquiring Lance, but we didn’t feel they were the right match.
TCM: How did you know that REV Group was the right match for Lance Campers, and vice versa?
Jack: One of the first things that happened after the initial inquiry is that I got a call from Tim Sullivan, the CEO of REV Group. During our twenty minute conversation, he asked if he could come out. Three days later he was here in California.
Jeff and I sat down with him for two to three hours. We showed him around our facility. He told us that he loved the Lance brand and product. He said that he only wanted to be involved with quality products and he wanted to help Lance Campers grow.
A week later Tim came out again. We went over operations and we got a good feeling from him. He is down to earth, level headed, and knows what he wants. It all clicked. He talked to us about the growth of REV Group and their recent acquisitions. He thought Lance Campers could be part of that.
TCM: The due diligence process a company goes through prior to being acquired is always challenging. How did things move forward after your initial meetings with REV Group?
Jack: The due diligence process is like putting a company through a CAT scan machine. Everything is sliced and diced. Having the audited financial statements helped to get the transaction done quickly and cleanly.
We had a deadline for the acquisition process of just forty-five days from start to finish. We were able to meet that deadline and get Lance Camper product into REV Group’s annual dealer conference in Orlando, Florida. Through that show we could see the size of the REV Group company. During the event, half a dozen RV dealers came to us interested in carrying Lance Camper products.
TCM: With their Lance Camper acquisition, REV Group gains access to the truck camper and travel trailer markets, access to Lance Camper’s technology and manufacturing processes, and Lance’s management and production teams. What does Lance Campers gain from REV Group?
Jack: One of the things that Tim asked us was if we had a blank piece of paper and all the money we needed, what would we do? When you get older, as an owner, you start thinking about reinvestments to grow the company. You have to wonder if you are going to be around to see things through. One of the things we know is that Tim and the REV Group are committed to the growth of Lance Campers and expanding the product line.
The capital side of the acquisition means Lance Campers has the funds needed to continue growing. Jeff and I have been focused on our ability to stay competitive with the mega RV manufacturers including the escalating cost of materials and doing business. REV Group now has 8,400 employees, including Lance’s approximately 500 employees. Now we benefit in negotiating our employees’ benefits and health insurance. It makes a difference with 8400 versus 500 employees.
As far as purchasing parts, we were really happy to hear that REV Group has an active procurement program. We can share vendor information and building block purchases based on orders for all of their product lines. REV Group already has a three person team that works with vendors to negotiate prices. This will insure that Lance will be competitive into the future with purchasing.
TCM: The majority of REV Group RV companies are located in and around Indiana. Will Lance Campers be moving?
Jack: There is no talk of moving Lance from California. REV Group actually has another company in California. That’s one thing Jeff and I liked when we first talked with Tim. A lot of companies don’t like to do business here. We have proven that you can make good money in California.
An advantage to being in California is that we are close to our customer base. California is number one in RV sales. A common complaint of dealers in the west is that the RV manufacturers are in Indiana.
A lot of RV materials come from Indiana, but there are also a lot of materials coming from China that are delivered on the west coast. We benefit from that. A truck load of refrigerators is still going to cost the same for freight, but now we get better pricing on those refrigerators through REV Group. That will have an impact on our bottom line.
Above: Tim Sullivan, REV Group President, addressing the team in the Lance boardroom.
TCM: Is REV Group planning on making any immediate changes at Lance Campers?
Jack: After the extensive due diligence process, REV Group knew Lance Campers better than I did in certain areas. The more they dug, the more respect they had for what we do. REV Group has been extremely complimentary of our company and of our staff. They came in and interviewed everyone. They told us that they’re not changing anything.
REV Group wanted to know about our marketing strategy. A lot of companies don’t know the difference between sales and marketing, but we do. They respected that. They said everything they looked at is awesome and to keep doing what we’re doing.
We try to be in a front line position under every category; from the development of internal software to new floor plans. We prioritize well and can work on multiple projects at once. The work that Bob Rogers, Director of Marketing, and Gary Conley, National Sales Manager, have done on our dealer tools and sales tools has been phenomenal.
TCM: Do you see REV Group keeping the entire management and production team in place for the foreseeable future?
Jack: As of now, REV Group has showed no indication that they will be taking people and moving them around.
We also have a few people close to retirement age at Lance Campers. We have two departments losing their managers in 2018 and we’re looking to replace those folks. We will be advertising for both positions as they are not positions we can replace from within Lance Campers. REV Group may want to promote these positions on their own website.
TCM: How long do you and Jeff plan on staying on with Lance Campers?
Jack: Jeff and I have agreed to stay on for two years. That could change.
TCM: As a privately owned company over the past half-century, there are likely to be some cultural changes over the coming months as REV Group becomes more involved with the company. How are Lance and REV Group approaching the cultural differences?
Jack: During due diligence, REV Group sent a super sharp guy from their engineering team to participate in the process. He had been with a competitor for 25 years who had been acquired. I asked him about that process. He said they brought in their own people and he didn’t like how it changed the culture of the company. I said we didn’t want that to happen at Lance Campers. He understood, and explained how REV Group does not want to change our culture.
The culture of Lance Campers is at the core of our company’s success. When Jeff and I retire from Lance Campers, people from within Lance will step up and take over the responsibility to maintain that culture. Culture gives the company direction on how to do things. I’m confident that the Lance culture will continue as long as management wants that to happen. If we lost our culture, it would impact our profitability. REV Group does not want that to happen.
TCM: Is REV Group 100-percent committed to building both Lance truck campers and travel trailers?
Jack: Yes they are, we just need to build more of them.
TCM: For current Lance Camper owners, will there be any changes to Lance Camper’s warranty?
Jack: Absolutely not. REV Group takes complete care of its customers. Lance Camper’s warranty is also so extremely low in comparison to other RV manufacturers.
TCM: Will the REV Group acquisition have any impact on quality and quality control at Lance Campers?
Jack: It won’t. All the same people with careers building the best Lance Camper product are still here. We already have a very low warranty rate and we want it lower. The public is demanding higher quality all the time and we owe it to the public to do that. Quality is at the core of our products and our brand and REV is committed to maintaining that level of quality.
TCM: REV Group has an established network of dealers. Will there be any changes to Lance’s current dealer network?
Jack: Through the REV Group, we are connecting with dealers who are in open territories for us. For example, we continue to have customers on the east coast who are disappointed that they have to travel so far to get to a Lance dealership. That’s an automatic fill-in for us.
During the REV Group event, Gary Conley came to me and said, “We’ve been trying to get some of these dealers for years. Now that we’re with REV Group they want the product line.” I said, “If they’re in an open territory, we’ll work with them.”
Current Lance dealers will also benefit from the association with REV Group. There will be REV Group dealers who pick up Lance product, and Lance dealers who pick up REV Group product. REV Group also has a relationship with Wells Fargo. Lance dealers will now have access to Wells Fargo’s flooring programs. This could have a big impact for some of our smaller dealers. That was a nice surprise when we were talking to the REV Group team.
TCM: Earlier you mentioned that REV Group is interested in expanding Lance Camper’s product line. Are we talking about Lance fifth wheels?
Jack: REV Group would like to see us involved in as many product lines as we are comfortable taking on. If we are to expand into bigger travel trailers, fifth wheels, or Class Bs, that would require a big jump. It might mean growing Lance Campers to five times the size we are now. We’re open to new product lines, but will be strategic in when and what we introduce.
TCM: Some dealers may be concerned with the idea of additional dealers and product lines, especially since they can’t seem to get enough Lance product as it is. How would you address these concerns?
Jack: Our recent 60,000 square foot expansion will help to a certain extent. Our sales team has been encouraging dealers to get their orders in six months in advance. Other RV manufacturers are also experiencing long backlogs. I spoke to a manufacturer last week with a 2,500 unit backlog, and they’re smaller than we are. Every RV manufacturer has large backlogs right now. Industry sales increased by 100,000 units in just the last two years.
TCM: Will Lance Campers continue to be a RVIA member under REV Group’s leadership?
Jack: We started working with REV Group in mid-November and finished up the acquisition in mid-January. During that period of time, the team member who represented REV Group on the RVIA Board of Directors left the company.
Up to that point, I was sure that the REV Group acquisition would mean my departure from the RVIA’s board. Then Tim asked me to stay on the RVIA’s board and represent both the REV Group and Lance. Tim believes it will be good to have the perspective of a small manufacturer and a larger company. I told him I’d be honored to stay on the board.
TCM: What’s next for Jack Cole? Will you be joining us on the road in a Lance Camper?
Jack: If REV Group decides they want to expand aggressively, I’ll stick around for a while longer. That would be an exciting opportunity from my perspective. If I can help with that groundwork, that would be a fantastic way to cap off my career.
That said, I’m not going to wait two years to get a truck and camper. And it will be Lance truck camper. My wife, Jeanette, has been asking me when we will get one. I will get a rig for us so we can travel around. We’ll be there by early summer. I look forward to traveling.
TCM: We look forward to seeing you on the road. Is there anything else you would like to share with Lance Camper customers, dealers, suppliers, and anyone else who feels connected to the Lance Camper company and brand?
Jack: Yes. Everything is going to be okay. I mean that sincerely. We put a lot of thought into what we have done, just as we put a lot of thought into our business. We want it to continue to shine as we move into the future. We have set Lance Campers on a good path with a great company.
Nothing has changed internally. Jeff and I are still here and the management is still here. The staff and everyone at Lance Campers is excited. No one has come to me and said that they are upset. We’ve taken care to do the right thing and Lance Campers is going to be around for a long time. We have done the best we can so that Lance can thrive for many generations to come.