Genmar sell Lund-Crestliner

[curt quesnell]

I meant Genmar SELLS lund-Crestliner

Interesting news..

Genmar had decided to get out of the
aluminum boat business and is selling
Lund and Crestliner to Brunswick corp.

Its a busy world out there.

[This message has been edited by curt quesnell (edited 03-09-2004).]

[Ole1855]

Curt,
One of the dealers I spoke with at the show on Sun. told me they sold the fishing boat lines because their sales have slipped. This guy said their dealers were having trouble getting enough 4-stroke outboards to fit them with since there are so many guys switching from 2-strokes to 4-strokes. Do you think there could be any truth to that?

Ole

[genio in duluth]

Genmar sells Lund, Crestliner boat lines
Mike Blahnik, Star Tribune

March 9, 2004 GENMAR0309

Lund and Crestliner, two of the most popular boats on Minnesota's 14,000 lakes, have been sold to an Illinois company.

Genmar Holdings said Monday it has sold the two Minnesota boat-builders plus its two other aluminum boat companies, Lund Canada and Lowe, to Brunswick Corp. for $191 million in cash so Genmar can focus on its fiberglass boat business.

A Brunswick executive said no job losses are expected in Minnesota, where 1,200 people work at Lund's plant in New York Mills and Crestliner's facility in Little Falls.

Lund and Crestliner each began as small companies in the late 1940s, and each was acquired by Minneapolis-based Genmar more than 20 years ago.

"These companies have been major contributors to Genmar for many years. In good times and bad times, our aluminum group has been stellar performers," Genmar Chairman Irwin Jacobs said.

"These people have become part of our family, so from an emotional point of view, it was the most difficult decision I've ever had to make in the boat business. But on the business side, it was absolutely the right decision for lots of reasons."

The four companies being sold had revenue of $311 million in the year ended June 2003, Brunswick said. Privately held Genmar doesn't disclose earnings for the companies, but Brunswick estimated they'll add earnings of 14 cents per share, or about $13.1 million in annual profits.

The deal, which is expected to close this month, will bring Genmar an additional $30 million if the brands hit certain earnings targets over the next three years.

The initial cash allows Genmar to pay off existing debt and have $100 million to fund expansion of its revolutionary VEC (virtual engineered composite) manufacturing technology.

"That's a major game-changing technology. We can build a boat in 45 minutes that takes 20 hours [using conventional technology] today," Jacobs said.

"There's a whole fundamental change that's taking place in our product lines today, and we have to spend the time, money, effort and resources where we need them. This gives us the opportunity to make lots of decisions right now rather than over the next several years."

(Last month Genmar spun off a company named VEC Technology to develop the process for uses other than boats. That new company, with an estimated value of $350 million, is taking on strategic partners such as Interplastic Corp. of St. Paul.)

Genmar owns 13 fiberglass boat companies, including Larson, Glastron, Four Winns, Ranger and Carver. The remaining companies have annual revenue of more than $900 million and about 5,000 employees. Genmar has about 16.9 percent of the fiberglass boat market share, just behind Brunswick's market-leading 17.5 percent, according to industry figures.

Sea Ray, Bayliner and Maxum lead Brunswick's fiberglass lines.

Brunswick's only current aluminum line, Princecraft, has an insignificant presence, while the acquired companies account for about 20 percent of the highly fragmented aluminum boat industry.

"We've had a long-stated strategy of moving into white space: segments that we're not presently in, and aluminum was a major piece of that," said Dustan McCoy, Brunswick Boat Group president.

"This allows us to begin to operate the Brunswick marine businesses in a much more integrated fashion. We are very focused on enveloping our dealers in products and services, and in order to accomplish that we need a full product line, and aluminum helps us fill that out."

Brunswick shares rose 96 cents, or 2.4 percent, Monday to close at a 52-week high of $40.29.

Genmar had offers from other companies, Jacobs said, but chose Brunswick because of the success it had in selling its Hatteras yacht company to Brunswick in 2001 for about $110 million, including $20 million after Hatteras hit its subsequent earnings targets.

Jacobs said company executives met with employees in the aluminum boat factories on Monday.

"Everybody was told there's no reason to panic," Jacobs said. "They bought it because of who we are and what we are; they didn't buy it to change it. These are absolutely star performers in the industry."

[Kevin Turner]

I would take slightly less (190 Million) for my aluminum boat company. LOL

[Ole1855]

Doesn't it seem a little odd that a company would sell off divisions that take in $311 million/year for $191 million? Normally companies are sold for more that they take in!! Sounds odd.

Ole

[IFallsRon]

$191 million is small change for Irwin Jacobs.

[widetrack]

311 million in sales, and the bottom line (profit) are two different animals.

[addicted]

From what I remember, you can't get a factory rigged boat from Brunswick,with a Yamaha motor.(I believe the other brands Brunswick make, you can only get Mercury)If that holds true...I won't even think of buying a Lund.

------------------
Addicted

It's not only a name, but a state of mind!

[This message has been edited by addicted (edited 03-09-2004).]

[Animal]

There are no shortage of boat buyers. I talked to a salesman at the Minnepolis Sports Show and he told me that he was having the best year ever. He said that many people come in to upgrade motors and walk out with a new rig. I'm sure that us Lund fans will see very little product difference in the near future. Sometimes changing hands bring in some fresh ideas which I think Lund could use.

[This message has been edited by Animal (edited 03-09-2004).]

[walleyehawk]

Being a Lund owner, I am not happy about this. Mercury and especially Motorguide are companies that are on the downturn. Motorguide hardly had a booth at the sportshow. For 4 stroke motors, most people recommend Suzuki, Yamaha and Honda's before Mercury's.

If I was forced to get a Motorguide on a Lund boat, I would keep what I have for boat or find a different brand. You have a real hard time even finding any major sporting goods store that carries Motorguide here in Minnesota.

I think it is interesting Irwin Jacobs is a big bass fishing man (FLW) and his desire to rule that world with his new fiberglass boats. Fiberglass boats have very limited appeal to the average walleye angler here in Minnesota.

[Guest]

anybody remember what happened when amf bought harley-davidson

[Blaze]

Ole,

Slipping fishing boat sales? It sure doesn't sound like it - that dealer must've been yankin' your chain. Check this out:

http://www.startribune.com/stories/531/4648408.html

A quote from the article:
"Boat sales are off to a sizzling start, with manufacturers and dealers reporting double-digit increases over last year."

"It looks like we're going to ship over $140 million worth this month. That annihilates anything we've ever seen," said Irwin Jacobs, chairman of Minneapolis-based Genmar Holdings Inc"

Jacobs continues...
"People are stepping up to larger, more-sophisticated product in every segment of the market we're in, whether it's aluminum, bass boats or cruisers," Jacobs said. There even could be some product shortages in some lines, he added, "which is something we haven't seen in a lot of years."

[marine_man]

addicted brings up a good point... Brunswick also owns Mercury... and motorguide. It should be interesting to see what happens there... regardless of what the factory ships boats with a dealer can always re-rig a boat for yamaha, johnson / evinrude, suzuki, etc.

I would really be surprised though if they stop offering pre-rig for yamaha, etc though.. I would imagine there would be a huge amount of pushback by the dealers...

I also wouldn't be surprised to see a motorguide become a standard accessory on a boat... they do it on just about every other brand they own...

I for one, am not very happy about the sale.

Interesting times lay ahead.. that's for sure...

marine_man

[simcox282]

Brunsiwick also bought out valley/dyanmo manufacturers of foosball,pool, etc. My worry was that they would change the foosball tour (yeah, I play on it). The nice thing is that they are publicly traded so I have more information about the company as a whole now. It will be interesting to see where they take things over the next couple of years.