The Monopoly on the Open Road

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This story is part of a Prospect series called Rollups, looking at obscure markets that have been rolled up by under-the-radar monopolies. If you know of a rollup like this, contact us at rollups(at)prospect.org.

Seaflo Marine executives were excited. They make component parts for boats, agricultural machinery, and recreational vehicles, and in 2019, they signed an exclusive five-year contract with one of the two biggest component distributors for RVs, Patrick Industries, for 500,000 units of a Seaflo plumbing part. It was a foot in the door with Patrick, a company with the scale and reach to put its products into many more RVs. Patrick even made an initial order of 30,000 units on day one.

Five years later, by the end of the contract, however, Patrick had only made a partial order of 10,000 more units. It was a loss for Seaflo of about $2 million, and they went to court over the breach of contract. That’s when they learned through discovery that, even before Seaflo and Patrick had signed the agreement, a Patrick subsidiary named LaSalle Bristol was completing work on the exact same plumbing part.

Even though Patrick sales staff acknowledged in internal emails that Seaflo’s part was superior and even cheaper, they prioritized LaSalle Bristol’s version instead, eventually moving one million of its units. This violated a clause in the agreement that said Patrick would not “represent or promote, design, manufacture or distribute, any lines or products that compete with the [Seaflo] Product.”

Seaflo would eventually allege that Patrick deliberately signed it up to the exclusive distributor agreement to capture their own subsidiary’s competition. “The exclusive agreement that was supposed to launch the Seaflo Product became the instrument of its exclusion,” states the revised lawsuit, which was filed in September. The case is ongoing.

Patrick did not respond to a series of detailed questions from the Prospect.

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The case has taken on new resonance because Patrick is about to become America’s dominant supplier of RV components. On June 30, Patrick announced a proposed $8 billion, all-stock merger with Lippert, the sector’s other major component distributor, creating a giant that could supply well over half the parts for a finished RV, from chassis to axles, windows to doors, interior furniture to appliances, plumbing to electrical, and much more. Any RV being mass-produced would be almost certain to use the combined company for its parts; independent component suppliers would have to work with Patrick, too.

The merger is the culmination of a decades-long rollup for Patrick, which owns more than 85 brands in the RV, manufactured housing, and marine space. According to the lawsuit, Patrick has acquired 65 businesses since 2017 and spent $560 million on mergers since 2023, narrowing the ecosystem of parts suppliers for RV manufacturers. Many of these acquisitions were too small to crack the threshold for federal merger review. The pending merger is kind of the boss level of this consolidation, where two companies that have been rolling up suppliers become one in what critics have characterized as a merger to monopoly.

Sen. Mike Lee (R-UT), chair of the Senate Antitrust Subcommittee, “raise[d] significant antitrust concerns” about the deal before it consummated. “The merged firm could gain leverage to raise prices or reduce output. These higher prices will ultimately be passed on to consumers in higher RV prices,” Lee wrote.

The Seaflo lawsuit, which is also challenging the merger, cites it as “part of Patrick Industries’ avowed strategy to dominate the industry … Patrick Industries will be the only game in town.” Their depiction of Patrick’s tactics of consolidation and control would have stakes for RV customers, manufacturers, the component network, and the Midwest community that relies on RV production as its lifeblood.

WHEN BARACK OBAMA TOOK OFFICE in 2009 after the financial crisis, the first place he visited was Elkhart, Indiana, which at the time was suffering from the biggest unemployment spike of anyplace in the nation. The jobless rate jumped 12 points in a few months and would eventually peak that March at 20.1 percent.

Elkhart is a manufacturing town with one primary product: recreational vehicles. More than 80 percent of the world’s RVs are made there. “Everyone I meet either worked in an RV factory or know someone who does in their circle,” said John Brewer, who himself works in maintenance for an RV tire and wheel supplier. Brewer is running for Elkhart County Council this year.

Traveling RVs are mostly a luxury good, and sales dry up during belt-tightening downturns. During the Great Recession, the housing crisis and high fuel prices devastated the RV sector, with many plants shutting down overnight.

Today, the region looks superficially strong, but inside the data are warning signs. A post-pandemic boom from people flush with stimulus checks pulled forward purchases, but that has petered out. In April, unemployment was a negligible 2.7 percent; by July, it had risen to 4.2 percent, a more than 50 percent jump in three months. (The August numbers fell back to 3.8 percent.)

The short version of an explanation is that inflation, both from tariffs affecting manufacturing and the run-up in gas prices during the Iran war, have taken a bite out of Elkhart yet again. This summer, the RV Industry Association revised its sales forecast downward by 8.4 percent; August shipments fell at twice that rate. Prices have subsequently plummeted.

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“RVs have dropped year over year for three straight years,” Brewer said. “I started at my company in 2021, if you worked 12-hour days and six hours on Saturday you got a $300 bonus … Now a lot of the RV facilities are down to four days a week, and some of them even down to three.”

This filters down throughout the industry. Declining sales mean manufacturers don’t place big orders with suppliers, and they purchase outside the normal supply chain to evade tariffs. This hurts component companies that make RV parts.

The obvious question that emerges is why Patrick, which is based in Elkhart and whose stock hit a 52-week low on Tuesday, would choose this moment to try to consolidate the component industry. Sales in its most recent quarter were flat, while RV shipments dropped 16 percent. But acquiring Lippert could be the solution to these woes, and Patrick is certainly acting like it, increasing its dividend for the seventh year in a row.

First, Patrick has stated publicly that the merger would generate $150 million in “cost synergies,” which is a euphemism for layoffs of redundant workers. Second, the merger would give Patrick unmatched inventory in an industry that’s hard to break into, because parts are specialized and often require certification. That could enable price increases without worrying about loss of market share. Manufacturers that could once play Patrick and Lippert off each other for pricing would have no ability to do so.

Finally, Patrick’s control of even a sagging industry would increase opportunities for the kinds of practices alleged by Seaflo Marine in its lawsuit. And that poses dangers for the community the RV industry primarily serves, said Christopher Kapsaskis, a partner in Seaflo Marine & RV North America LLC.

“An $8 billion merger is a big thing,” Kapsaskis said, “but in Elkhart, it’s everything.”

THE SEAFLO PRODUCT IN THE AGREEMENT with Patrick is known as a waterless P-trap. Typical plumbing pipes, like those under a sink, bend in a P shape and create a water seal to stop noxious gases from entering the house, while also making it easier to retrieve items that fall through the drain. But they collect water that may freeze over in an RV sitting idle. Seaflo’s waterless waste valve, which had three components, solves that problem and requires less space, which is important for tiny RV kitchens and bathrooms.

Seaflo’s deal with Patrick was struck on April 19, 2019, with the commitment for 500,000 unit sales and the initial 30,000 buy. The conflict of interest clause covered Patrick and “any entity controlled by or under common control.”

LaSalle Bristol absolutely fit that definition. Patrick had publicly announced the purchase of LaSalle Bristol for $54 million in December 2018. Though the Indiana secretary of state lists it as a different corporation, the president and CEO of LaSalle Bristol, Andrew Batson, was also a senior vice president with Patrick. Patrick CEO Andy Nemeth was also on LaSalle Bristol’s board; the companies shared two other board members, Matthew Filer (who is listed as treasurer for both firms) and Joel Duthie (listed for both as secretary). In its 2023 annual report, Patrick lists LaSalle Bristol as one of its “manufacturing and distribution centers.”

In February 2019, two months before the Seaflo agreement, LaSalle Bristol applied for product certification of something called the Utopia Uniguard, a waterless P-trap that served the same function as Seaflo’s product. By April 9, ten days before the Seaflo agreement, the Uniguard received that certification and was ready for sale as a direct competitor to Seaflo. It was “The New Standard of Excellence,” the Uniguard boasted in marketing materials.

Patrick started selling the Uniguard in May 2019, while having Seaflo under contract for the same part. Seaflo alleges that one million Uniguard units were sold through Patrick, for a total of $7.9 million in revenue.

According to the lawsuit, Patrick never informed Seaflo that they were pushing the competing product, despite contractual language requiring that communication. On the contrary, Patrick assured Seaflo that it would help it compete against the Uniguard.

Internal messages obtained in the lawsuit were revelatory. In October 2020, Brian Hess, a vice president of sales with LaSalle Bristol, wrote to Chris Murray, his counterpart at Patrick, about sales to a particular RV manufacturer, Forest River. “What I wanted to talk to you about is SeaFlow [sic] waterless P-traps,” Hess wrote. “My sales team is telling me that you guys are getting aggressive to try and take this business. We presently have all the business through our Uniguard product.” Hess wanted Murray to stop Patrick sales agents from being “overly aggressive,” which would force LaSalle Bristol to drop prices and “sell the product … at a significantly reduced margin.”

Murray, who signed the Seaflo contract, responded cordially. “I completely understand and appreciate where you are coming from, and certainly support the effort to keep overall margins as high as possible.” LaSalle Bristol kept the business. “Tellingly, Murray did not respond by noting that Patrick Industries was contractually obligated to use its best efforts to promote and maximize the sale of the Seaflo Product and barred from promoting or selling a competing product,” the lawsuit notes.

In 2022, the third year of the five-year agreement, Patrick bought 10,000 units of one of the three components that made up Seaflo’s waterless P-trap. That was the last Seaflo purchase it made, falling well short of the 500,000 units promised in the exclusive deal. Patrick and LaSalle Bristol now control 90 percent of the waterless P-trap market for RVs, according to the lawsuit.

With Seaflo’s product locked away, LaSalle Bristol raised prices for the Uniguard, the lawsuit alleges. Brewer, the industry worker and county council candidate, said this was a familiar pattern in the industry. “They offer decent pricing for a couple years, price the competing small businesses out, and then have everything to themselves.”

An internal email from 2022 describes a Seaflo meeting with Patrick, where Seaflo made clear that it knew Patrick was an entryway for other products of theirs, something Patrick intimated in its communications. “They see the benefit that a company like Patrick can offer them,” Patrick’s Orrin Price reported to the sales team. However, Price did want “a huge push to get these waterless p traps moving,” because he was worried that Seaflo would take its business elsewhere if there were no sales.

Trenton Miller from Patrick replied. He said that Seaflo’s product would be “a cost savings against the Uniguard waterless p trap that LaSalle is pushing right now,” he wrote, adding that “the SeaFlo looks and feels like a higher quality part.” Chris Murray responded that he didn’t want “complaints from the LSB [LaSalle Bristol] side that we’re quoting against them.” In the end, LaSalle Bristol held the business.

The contract expired in 2024, and shortly thereafter Seaflo was informed that the division of Patrick they were working with was closing down. Batson, the LaSalle Bristol CEO, told Patrick employees in an internal email to “MINIMIZE vendor communication” with Seaflo and transition all sales to LaSalle Bristol, which “makes a competitive product” with “nice margins.” Added Patrick’s David Smith: “I’d prefer not to buy anything from [Seaflo] at this point. If we can transition this business to Lasalle, that would be great.” Smith also brought up Seaflo’s legal claims. He removed the main point of contact between Seaflo and Patrick from the thread.

ACCORDING TO SEAFLO, THE ALLEGATIONS in its lawsuit are a harbinger of things to come if Patrick is allowed to merge with Lippert. Patrick signs up both independent component makers to exclusive contracts, and outright buys component suppliers whose products they promote and sell. RV components are specialized and certified, making it easier to consolidate the industry, create high barriers to entry, and, as Seaflo alleges, target and lock out the competition.

Patrick’s own annual report filed with the Securities and Exchange Commission states that it is “focused on driving growth in its primary markets through the acquisition of companies,” as well as adding “additional product lines, facilities, or other assets to complement or expand its existing businesses.” On a recent investor call, Patrick CEO Andy Nemeth said that the company was “feeling some possibilities” for even more acquisitions throughout the rest of 2026.

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After the Patrick-Lippert merger, makers of RVs would have “a convenient, one-stop shop for the many components required to manufacture,” the lawsuit argues. It’s virtually impossible for a small seller without a logistics network to supply manufacturers on its own; especially because of the just-in-time nature of RV production, component suppliers need a distributor like Patrick or Lippert. Now those two will be combined into one.

“This is going to kill any small component suppliers that even try to be active,” said Brewer. Patrick and Lippert, he said, “had already been essentially creating two monopolies, now they’re merging into a super-monopoly. I’ve had people asking how is this legal. I’ve said, ‘It shouldn’t be.’” Workers in particular could be squeezed, with fewer job options for their services. “It’s already a desperate market,” Brewer said. “It’s becoming a rare occurrence to have a 40-hour-a-week job.”

Brewer added that an unusually large number of people were talking about the Patrick-Lippert merger behind the scenes, but there’s reluctance to condemn it publicly. “People are afraid to speak up because of the power these companies can wield,” he said.

One of the few companies that has raised objections is THOR, a major manufacturer, which listed the merger as a “potential business risk” in its annual report, fearing that Patrick will impose pricing power and push RV costs up. The irony here is that THOR has embraced the same growth-through-acquisition strategy as Patrick on the manufacturing side. It owns Airstream, DRV Luxury Suites, Entegra, Heartland, Jayco, Keystone, KZ, Open Range, Tiffin, Venture; a total of more than 50 brands. “I guess they should know about monopolies,” said one commenter to a Facebook post about THOR’s concerns.

Defending the combination, Patrick has mainly emphasized the ability for the merger to lead to “bolstered financial performance, reduced costs, and a continued focus on execution.” And investors are appreciative; stock analysts consider Patrick a solid buy, with price targets significantly above its current position. The deal is expected to close in the first half of next year.

“A lot of people know the big mergers and acquisitions, this is one that was going to go under the radar,” said Christopher Kapsaskis of Seaflo. “Everyone else is a smaller player, they don’t have weight to throw around.”

Asked why Seaflo was challenging such a big player in the industry that could hold the company’s fate in its hands, Kapsaskis said: “It’s definitely a scary time, but this is a fight that has to be fought.”

The post appeared first on The American Prospect.