Brunswick announced today that it has signed a definitive agreement to acquire Hatteras Yachts from Genmar Industries for approximately US$80 million in cash
Brunswick announced today that it has signed a definitive agreement to acquire Hatteras Yachts from Genmar Industries for approximately US$80 million in cash. The Brunswick Boat Group has recently purchased Sealine and also includes Bayliner, Sea Ray and Mercury.
The agreement contains provisions for an additional payment of up to US$20 million based on Hatteras achieving certain financial growth targets over the next 20 months. Brunswick will also receive future tax benefits, which have a present value of approximately US$13 million.
Hatteras is one of the USA’s major builders of large, semi-production recreational craft. It builds sportsfishers from 50-70ft and motoryachts from 63-100ft. Midway through this year Genmar chairman Irwin Jacobs, who is also a major shareholder in Hatteras, led a management buyout bid for the brand. Although Hatteras had just had its most profitable year in a decade, Jacobs and the Hatteras management argued that there were minimal synergies between it and the other Genmar boat brands which are more volume-market oriented. The bid did not succeed, as indicated by today’s announcement.
Commenting on the announcement Brunswick chairman and chief executive officer George Buckley said: “Hatteras is the premier US manufacturer of luxury sportfishing convertibles and motoryachts in the 50ft to 100ft range. It is also a brand with significance stretching well beyond its size in sales.
“There is virtually no overlap in the product line between Hatteras and our Sea Ray, Bayliner and Maxum pleasure boat brands, making this an excellent addition to our Brunswick Boat Group,” he continued. “Our international large yacht distribution network will also enable us to leverage sales overseas. Moreover, this acquisition will allow us to meet the needs of our boating customers who desire to move up in size and luxury, especially in the United States.”
Headquartered in New Bern, North Carolina, Hatteras has annual sales of approximately US$130 million. From its 580,000sq ft manufacturing facility, Hatteras builds 15 models of sportfishing convertibles and motoryachts and sells about 70 boats per year.
“We intend to leverage Hatteras’ large-boat expertise across our other large-boat brands,” Buckley said. He said that Hatteras would remain based in New Bern, and president William Naumann and his management team would continue to operate the business, reporting to Dustan McCoy, president of the Brunswick Boat Group.
Brunswick said the transaction, due for completion by the end of November, is subject to governmental approval and other customary closing conditions.