Agreement signed with private investment firm KPS Capital Partners
In a move to solidify its position as a pure marine company, Brunswick Corp has entered an agreement with the private investment firm KPS Capital Partners LP for the sale of its Fitness division for US$490m.
“With the sale of the Fitness business, we sharpen our focus on Brunswick’s unique and formidable marine platform,” explains Brunswick CEO David Foulkes in a statement.
“Brunswick has an impressive stable of recognised and respected brands and offers the right products and services uniquely concentrated in growing and emerging marine market segments. Brunswick is exceptionally positioned as a leader in the marine industry, and we are excited about the bright future ahead of us.”
Brunswick had more than $4bn annual revenue from its marine products and services in 2018. The Fitness business will be reported as a discontinued operation starting in the second quarter, matching the guidance already provided on a marine-only basis.
“Consistent with our communicated plans, our capital strategy is focused on maintaining a strong balance sheet, investing in organic growth initiatives and returning value to our shareholders. Importantly, we will work with our board in the near-term to refine plans to deploy the capital from this transaction to increase shareholder returns,” Foulkes concludes. “As we have previously described, likely options will include engaging in share repurchases, accelerating planned debt retirement, and deploying additional capital for mergers and acquisitions. Any benefits generated by these potential actions are not currently reflected in our 2019 capital plan or guidance.”
Brunswick purchased Life Fitness in June of 1997 as part of a diversification strategy away from reliance on the marine product line.