Brunswick acquires saltwater fishing boat brands

LAKE FOREST, Ill. – Brunswick Corp. has acquired Sea Pro Boats, Inc., and Sea Boss Boats, LLC, of Newberry, S.C. – which produce the Sea Pro, Palmetto and Sea Boss brands of saltwater fishing boats – for approximately $51 million in cash, the company reported this morning.

The three brands will join with Brunswick’s Boston Whaler to form a new Saltwater Boat Group, based in Edgewater, Fla.

Michael W. Myers, currently president of Boston Whaler, will head up the new business unit, reporting directly to Dustan E. McCoy, president of the Brunswick Boat Group.

Sea Pro will continue to be based in Newberry with founder Tommy Hancock remaining as president. He will report to Myers, who also will continue to direct day-today operations at Boston Whaler until a successor is named.

The three brands had sales estimated at approximately $80 million in 2004, Brunswick said. There is also a $4 million earn-out provision in the transaction, which will be based on achieving 2005 performance objectives.

“Two strategic goals for Brunswick are to ‘fill in the white space’ in key and growing segments of boating and to better ’embrace our dealers’ by offering them the opportunity to represent a broad array of boats and prestigious brands. We believe this acquisition fulfills both of those objectives,” said George W. Buckley, Brunswick chairman and CEO. “Boston Whaler is one of the best known and most highly regarded brands in boating. The Sea Pro, Sea Boss and Palmetto brands will augment our saltwater portfolio. In turn, as with all our acquisitions, we will focus Brunswick’s financial and technical resources and expertise on growing and advancing these brands.”

Industry analysts react

Analysts with Banc of America Securities said in a release this morning that they believe the acquisition will help Brunswick’s FY05 results.

“We expect the acquisition to be accretive to Brunswick’s FY05 results,” Banc of America reported. “BC did not provide the expected bottom line impact of the acquisition on FY05 results. However, we estimate that the acquisition could be accretive by as much as $0.04-0.05 partially based on Brunswick’s ability to package Mercury engines with the acquired boat brands.”

Banc of America said it would maintain its “Neutral” rating on Brunswick, and believes the company is nearly fully valued at 14.6x its FY05 EPS estimate of $3.40.

Brunswick’s purchase this morning is the latest in a series of boat brand acquisitions. In March, Brunswick bought the Lund, Lowe and Crestliner aluminum boat brands from Genmar for a reported price of about $191 million in cash.

“The goal of the Brunswick Boat Group is to offer our dealers a full line of products in all major powerboat segments,” McCoy said in March.

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