Brunswick Corp. has announced that its board of directors has authorized proceeding with a spin-off of its fitness business.
Following the proposed transaction, the fitness business will be an independent, standalone, publicly traded company, "FitnessCo."
"Our Board of Directors and management regularly review our portfolio of businesses and brands, and after careful review, have determined that a spin-off of the fitness business is the best option to maximize the value of both businesses," said Brunswick Chairman and Chief Executive Officer Mark Schwabero in a news release.
With the announced action, FitnessCo will be positioned to continue to grow, innovate and provide customers with high-quality solutions while also ensuring that Brunswick's marine business is best positioned to continue creating value for shareholders," Schwabero stated.
"We are pleased to have built two well-established businesses that are clear leaders in their respective industries, and both will benefit from greater focus and dedicated leadership with each pursuing distinct strategic plans that will drive targeted investment, attractive growth and shareholder returns," Schwabero said.
FitnessCo (which will be formally named at a later date) will remain a global leader in commercial fitness equipment and billiards game tables and furnishings, he added.
The spun-off fitness business will continue to manufacture and sell strength and cardiovascular equipment and game tables and accessories under the Life Fitness, Hammer Strength, Cybex, Indoor Cycling Group, SCIFIT and Brunswick Billiards brand names.
As an independent company, FitnessCo will be able to focus more sharply on driving product leadership, operational excellence and technology development to address evolving commercial fitness marketplace trends. FitnessCo sales revenue was $1.03 billion in 2017.
FitnessCo will remain headquartered in Rosemont, Ill. Jaime Irick, current president of the company's fitness division, will lead FitnessCo upon completion of the transaction.
Following the spin-off, Brunswick, comprised of the marine engine and boat segments, will remain a global leader in recreational marine products, Schwabero stated.
The marine engine segment, which consists of Mercury Marine, manufactures and distributes a broad range of marine propulsion systems and related parts and accessories.
The boat segment manufactures and distributes a range of recreational boats under 14 boat brand names including Boston Whaler, Bayliner, Lund, Lowe, Harris and others. These businesses generated approximately $3.5 billion in sales in 2017.
Schwabero will continue to lead Brunswick following the spin-off. The company will remain headquartered in Mettawa, Ill., and will continue to trade on the New York Stock Exchange under the ticker symbol BC.
The Brunswick Board of Directors authorized members of its Executive Committee to oversee the transaction process. The proposed transaction is anticipated to be tax-free to Brunswick shareholders for U.S. federal income tax purposes.
Details of the distribution will be included in a Form 10 registration statement filed with the Securities and Exchange Commission at a later date.
The proposed transaction is projected to be complete by the end of Q1 2019, subject to final approval from Brunswick's board and other customary conditions.
The company will hold a conference call today to discuss the planned transaction at 10 a.m. CST, hosted by Mark D. Schwabero, chairman and chief executive officer, William L. Metzger, senior vice president and chief financial officer, Ryan M. Gwillim, vice president - investor relations, and Jaime A. Irick, the leader of FitnessCo.