MasterCraft has acquired NauticStar, LLC, for approximately $79.8 million. The transaction is expected to be accretive to MasterCraft’s earnings per share in fiscal 2018.
MasterCraft’s acquisition of NauticStar was completed as a simultaneous sign and close. In a conference call this morning, Chief Financial Officer Tim Oxley said MasterCraft will use cash on hand and a new, $145-million credit facility utilizing a term loan totaling $115 million to finance the deal.
Oxley announced a combined pro forma leverage ratio of 2:1 times the adjusted EBITDA.
NauticStar will contribute between 20 and 25 percent of the combined company revenue in fiscal 2018, Oxley said during the conference call.
“We are very excited to welcome NauticStar to the MasterCraft Family," said Terry McNew, MasterCraft’s president and chief executive officer. "NauticStar is a well-respected, expertly built and uniquely positioned brand. The company’s outboard bay, deck and offshore center console boats provide MasterCraft with additional product diversity. They also provide MasterCraft a presence in saltwater fishing as well as outboard propulsion, two of the fastest growing segments in the broader boating industry.”
The deal unites two leading, and complementary boating brands and is anticipated to increase MasterCraft presence in salt water fishing and outboard propulsion—two of the fastest growing segments in the broader boating industry.
Founded in 2002, NauticStar, located in Amory, Miss., is privately owned and operated. With more than 15 years of boat manufacturing experience — including a 200,000 square-foot manufacturing facility — NauticStar has a reputation for reliability, quality and consistency, with a loyal network of dealers and customers including professional and sport fishermen, and recreational and pleasure boating enthusiasts.
NauticStar currently sells its boats in the United States through an established network of approximately 70 dealers. In calendar year ending 2016, the company generated approximately $63.7 million in net sales and is expected to approach $80 million in net sales for the calendar year ending 2017.
“Additionally, NauticStar’s year-over-year unit growth is among the strongest in the 18-28 foot category and demand domestically currently exceeds supply. We look forward to leveraging our industry-leading strengths in operational excellence and financial management to further improve NauticStar’s output, quality and margin as we continue their rapid growth," McNew said.
NauticStar will maintain its current headquarters and manufacturing facility in Amory, Mississippi, approximately 300 miles southwest of MasterCraft.
“MasterCraft is an iconic brand known for quality, performance and innovation. Our entire organization is excited to join their team, and leverage their experience and operational know-how to further grow NauticStar. This is a great opportunity for all of our employees, as well as customers and dealer partners," said NauticStar Owner and Founder Phillip M. Faulkner.
King & Spalding LLP served as legal advisor to MasterCraft. Legacy Capital Advisors, LLC served as financial advisor to NauticStar on the transaction.