Buying the brands from Genmar seals Brunswick’s place as the world’s biggest boat manufacturer
Brunswick Corp. has signed an agreement to buy the Crestliner, Lowe and Lund aluminum boat brands from Genmar Holdings Inc. for about $191 million in cash, plus an additional $30 million potential earn-out.
The sale likely will tip the balance and eliminate any debate over which is the largest boatbuilding company.
“There’s no doubt that [with this acquisition] we’re the largest boat manufacturer in the world in both dollar sales and units,” said Dustan McCoy, president of the Brunswick Boat Group.
McCoy said the acquisition is consistent with Brunswick’s long-expressed strategy of filling in the “white spaces” of the Brunswick product line, providing dealers with a complete range of products and services, and operating in a more integrated fashion.
The agreement covers Crestliner Inc. in Little Falls, Minn; Lowe Boats Inc. in Lebanon, Mo.; Lund Boats Inc. in New York Mills, Minn.; and Genmar Boats Canada Inc. (which produces the Lund brand in Canada) of Steinbach, Manitoba. McCoy said Brunswick plans to continue operating all four plants, and will maintain the existing dealer base.
Each of these companies produces aluminum fishing, pontoon, deck and utility boats ranging from 10 feet to 25 feet. Combined, they had sales of $311 million in the year ended June 30, 2003.
Genmar chairman Irwin Jacobs said the sale fits in well with Genmar’s own strategy as well.
“Genmar’s board of directors unanimously agreed it would be in the best interests of the company and its shareholders to put all of our efforts and resources towards the future development and expansion of Genmar’s 13 remaining fiberglass boat companies [Carver, Four Winns, Larson, Glastron, Wellcraft, Hydra-Sports, Aquasport, Seaswirl, Ranger, Champion, Stratos, Triumph and Windsor Craft],” Jacobs said in a statement.
Genmar last month completed the spin-off of its VEC Technology company into a stand-alone company with the new corporate name of VEC Technology LLC. After the sale of the boat companies is completed, and with the VEC spin-off, Jacobs said Genmar would have minimal long-term debt and over $100 million in cash.
“With Genmar’s balance sheet in the strongest financial condition it’s ever been, we will have the opportunity to accelerate our implementation of VEC and VEC Shield patented boatbuilding processes throughout our facilities and product lines,” he said.
After the sale, Genmar will consist of 13 fiberglass boat companies with total annual sales in excess of $900 million, 5,000 employees, and eight manufacturing locations. The acquisition will give the Brunswick Boat Group — which includes Land ‘N’ Sea and Attwood marine parts and accessories — a total of 13 brands, over $2 billion in sales, and 10,500 employees and 24 manufacturing facilities around the world.
Subject to governmental approval and other customary closing conditions, the transaction is expected to be completed by the beginning of the second quarter.