Polaris Industries has signed an agreement to acquire Boat Holdings from the Vogel family, company management, and Balmoral Funds, in an all-cash transaction valued at $705 million. Balmoral Funds partnered with Steve Vogel, Founder and CEO of the company, to acquire Boat Holdings in December 2009 from Summit Partners.
Boat Holdings’ pontoon, deck and cruiser boats are sold under the Bennington, Godfrey, Hurricane and Rinker brands and are available in over 200 customizable base models across a range of price points. The company uses an asset-light manufacturing model and sells its boats through a network of 500 active dealers primarily in the United States and Canada. The company is headquartered in Elkhart, IN (www.benningtonmarine.com). In 2017, Boat Holdings generated approximately $560 million in sales with an EBITDA of $74 million resulting in an EBITDA valuation multiple for this transaction of 9.5x.
Boat Holdings is the largest manufacturer of pontoon boats in the US, considered to be the largest and fastest growing segment in the marine industry. The US market for new powerboats is an $8 billion market and sales in the pontoon boat category have grown at an 11-percent compounded annual growth rate since 2010, while Boat Holdings’ pontoon brands, Bennington and Godfrey, have grown at an even faster pace over the same time period. The US boat industry is still recovering from the “great recession” which began in 2009. In 2017, Americans bought just 262,000 recreational vessels, 36 percent below the peak in 2005, according to the National Marine Manufacturers Association.
Polaris Industries (NYSE: PII) manufactures snowmobiles, ATVs, and motorcycles under the Indian brand name. The company has annual revenues of approximately $5.4 billion and is headquartered in Medina, MN (www.polaris.com).
“Boat Holdings is renowned for innovation and quality and we are excited to have them become part of our portfolio of industry-leading powersports vehicles. This transaction epitomizes our disciplined growth strategy of entering attractive markets where we can establish and extend our leadership position. In addition to market share leadership, Boat Holdings expands Polaris’ footprint in the recreational outdoors market, commanding more of consumers’ discretionary spending. Our product lineup will offer options to be enjoyed on the roads, trails, sand, dirt, snow and water,” said Polaris Chairman and Chief Executive Officer Scott Wine.
Balmoral invests in corporate carve-outs, restructurings and other special situations. The firm targets investments of $5 million to $30 million of equity in companies that have $30 million to $300 million of revenues. Balmoral is headquartered in Los Angeles (www.balmoralfunds.com).
Upon closing of this transaction, expected during the third quarter of 2018, Boat Holdings will operate as a business unit of Polaris and will maintain its headquarters and manufacturing facilities in Elkhart, IN.
Stephens Inc. was Boat Holdings’ financial advisor and Goldman Sachs & Co. advised Polaris.
© 2018 Private Equity Professional | May 31, 2018