Brunswick Corp today announced it has entered into a definitive agreement to acquire Power Products’ Global Marine & Mobile business for US$910m in cash.
The acquisition includes the global marine, specialty vehicle, mobile, industrial power, and transportation aftermarket products businesses of Power Products, and includes 11 top marine brands – Ancor, BEP, Blue Sea Systems, Czone, Del City, Lenco Marine, Marinco, Mastervolt, Park Power, Progressive Industries and ProMariner.
Power Products - Global Marine & Mobile will join Mercury Marine's global parts and accessories (P&A) organisation. Mercury is Brunswick's largest division, and a global leader in marine propulsion as well as marine parts and accessories.
“This transaction advances Brunswick's leadership by adding integrated electrical systems solutions to the marine market and an array of other mobile, specialty vehicle and industrial applications,” says Brunswick chairman and CEO Mark Schwabero in a statement.
“Power Products has an extensive aftermarket presence which provides a more consistent revenue stream, with attractive margins, that helps to strengthen Brunswick's overall business profile.”
Revenues for the business totalled approximately $233m (for the trailing 12-month period ended March 31, 2018), with attractive revenue growth, along with strong margin and earnings levels. Mercury Marine's P&A business accounted for about $1.3bn – or about 28% – of Brunswick's total 2017 annual revenues.
With Power Products, Brunswick expects Mercury's P&A business to have revenues on a run-rate basis that will exceed its previous 2018 target of $1.5bn.
“Our marine strategy aims to better serve customers and drive value through enhanced sales and service to the broad and growing installed base of boats and engines,” Schwabero explains. “We plan to leverage the unique expertise of each brand to generate revenue and operating synergies and promote growth for both Mercury Marine and Power Products with our broad, combined product portfolio.”
Brunswick will be using a combination of debt and cash on its balance sheet to fund the acquisition. Brunswick says it remains committed to maintaining its investment grade credit rating and expects to report a debt-to-EBITDA ratio comfortably below 1.5X by the end of 2019, including the anticipated impact of the planned Life Fitness spin.
Power Products is a privately held company based in Menomonee Falls, Wisconsin, owned by San Francisco-based private equity firm Genstar Capital. The acquisition does not include Power Products’ Electrical Construction & Maintenance business.