Consolidation: Love it or hate it?

We live in a time of consolidation, as the news of Garmin’s bid to acquire Raymarine this week once again illustrates. Airlines, automakers and certainly media companies, among others, are combining forces like never before in hopes of increasing their returns in an uncertain economic future.

The boating industry has seen its share of mergers and acquisitions as well. That’s nothing new, change has always been a constant. Brands, and the companies that make them, change hands through the years, coming and going. Dealers change the lines they carry, manufacturers change dealers, finance and insurance companies enter and leave the market.

But if the pace of consolidation picks up in the marine industry and begins to mirror the trend seen in other industries, is that a good thing or a bad thing for boating?

An often-heard complaint is that there are (or at least were) too many boat builders, too many boat models and too many boat dealers, in some markets. When talking about the recession, a lot of people will also often mention that for all the pain and suffering that’s been caused, the one positive from the whole ordeal will be that those businesses that survive will have been streamlined by necessity and will help form a healthier industry with more potential for growth.

Consolidation, voluntary or otherwise, is taking place. Some people may see that as a threat, others an opportunity. What’s your opinion? If you would like to share some thoughts, please comment below.

One comment

  1. How about this……..

    On the same day this appeared – “Raymarine – Administrator appointed” – followed by “FLIR acquires Raymarine”.

    The ONLY winner from this bed-and-breakfast financial deal with the Administrator is………..(guess what)……..FLIR.
    I would suggest a moratorium (for at least 90 days) on procuring ALL / ANY Raymarine products from today. Maybe then they’ll get the message?
    And by the way, for those who don’t already know – most / nearly all Raymarine products are now manufactured in Central Europe and the Far East by Foxconn (a Hon Hai subsidiary) – a major global Far East owned electronic sub-contract supplier (China etc.).

    Below is a transcript from a popular magazine News page:

    Raymarine – Administrator appointed
    A statement just released by Raymarine states that administrators have been called in after its banking syndicate called in its loans this afternoon. The statement reads:
    “As announced earlier today, Raymarine’s banking syndicate informed the Company late last night that they were not willing to grant a further waiver of its current non-compliance with its covenants. The Company has now received a formal written demand from its banking syndicate, whereby the banking syndicate have declared that all loans outstanding under the Raymarine group’s banking facilities are immediately due and payable. The Company has advised the banking syndicate that it is unable to meet this demand.
    The banking syndicate has now informed the Company that it is taking steps to have an administrator appointed to Raymarine plc and, in accordance with the Listing Rules and the usual practices of the UKLA, the Board has requested that trading in the Company’s shares be suspended. It is not anticipated that any other company in the Raymarine group will enter into administration.”

    FLIR acquires Raymarine.

    FLIR Systems Inc said Friday it had entered into an agreement with the Administrator of Raymarine plc to acquire all of the outstanding shares of its wholly owned subsidiary, Raymarine Holdings Ltd. The transaction was valued at US$180m, including repayment of all Raymarine’s debt and about US$24m in proceeds to Raymarine plc. That is the equivalent of 20 pence per ordinary share. Raymarine had sales of US$170m in 2009.
    FLIR President and CEO Earl Lewis called it a “strategically compelling” transaction. “Raymarine is a leading brand in the industry and has an outstanding reputation for high quality marine electronics equipment,” said Lewis in a statement. “When fully integrated, we expect to have a significant marine electronics business as part of our Commercial Systems business.”
    Lewis said the acquisition will increase its distribution network with the addition of Raymarine’s 1000 dealer outlets and 400 marine OEMs. FLIR intends to integrate its thermal imaging products with Raymarine’s marine electronics technology.
    FLIR designs and manufactures thermal imaging and stabilized camera systems for different industries and applications. FLIR expects the transaction to be neutral to 2010 earnings.
    According to its website, FLIR had US$1.15bn in sales in 2009, and has 1,900 employees worldwide. It says it conducts business in more than 100 countries.

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