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MasterCraft signs agreement to acquire Crest Marine LLC

MasterCraft signs agreement to acquire Crest Marine LLC
MasterCraft signs agreement to acquire Crest Marine LLC

September 10, 2018

BY MASTERCRAFT

MCBC Holdings, Inc., the parent entity of MasterCraft Boat Co., LLC , and NauticStar, LLC, has entered into a definitive agreement to acquire Crest Marine, LLC, a U.S. manufacturer of high-quality pontoon boats, for approximately $80 million.

MasterCraft also expects that approximately $10 million net present value of future net tax benefits will accrue to the combined company.

The transaction is expected to close in the fourth quarter of calendar 2018, subject to customary closing conditions, and is anticipated to be immediately accretive to adjusted earnings per share.

Highlights:

  • MasterCraft gains leadership position and additional growth avenue in the large, fast-growing pontoon segment
  • Crest is a premium brand with a differentiated vertically integrated business model
  • Further establishes MasterCraft as a key player in the outboard propulsion category - the largest category in the powerboat industry
  • With the acquisitions of Crest and NauticStar, MasterCraft is the only boat manufacturer with three complementary, dedicated brands serving the three fastest-growing segments of the powerboat industry
  • MasterCraft’s operational excellence, product development and distribution footprint provide opportunity to further drive growth and margin expansion.

Founded in 1957, Crest is privately owned and operated out of a 150,000 square-foot manufacturing facility located in Owosso, Michigan.

With more than 60 years of boat manufacturing experience, Crest has a reputation for innovation and quality, with a growing, loyal network of dealers and customers.

Crest currently sells its boats in the United States and Canada through an established network of approximately 120 dealer locations.

In calendar year ending 2017, the company generated approximately $65.9 million in net sales. Net sales are expected to grow to approximately $90.0 million in calendar 2018.

“We are very excited to welcome Crest to the MasterCraft Family," said Terry McNew, MasterCraft’s president and chief executive officer. "Crest is a well-respected, expertly built and uniquely positioned brand. The company’s pontoon boats provide us with additional product diversity and presence in the attractive pontoon segment, as well as further establishes MasterCraft in the outboard propulsion category, two of the fastest growing areas within the broader boating industry. With its vertically-integrated business model, Crest differentiates itself from its competitors, allowing it to better control pricing, and generate higher margins."

Crest’s retail unit growth is among the strongest in the pontoon segment McNew said. From 2011 to 2017, Crest grew its annual retail unit sales by a compound annual growth rate of nearly 23 percent, more than double the strong growth of the broader pontoon segment, which grew total retail unit sales at 10.9 percent over that same time.

"We believe we can continue this track record of growth through leveraging our industry-leading strengths in operational excellence, financial management and distribution, while driving further improvements in Crest’s output, quality and margi," McNew added.

Crest will maintain its current headquarters and manufacturing facility in Owosso, Mich. The transaction is expected to be immediately accretive to adjusted earnings per share.

“MasterCraft is an iconic brand known for quality, performance and innovation," said Crest owner and CEO, Patrick Fenton. "Our entire organization is excited to join their team, and leverage their experience and operational know-how to further grow Crest. This is a great opportunity for all of our employees, as well as customers, dealer partners and suppliers.”

The acquisition of Crest is the logical next step in MasterCraft's strategic plan to acquire profitable, growing, premium brands in fast-growing segments that further diversify the company's product portfolio, McNew said.

"As a combined organization, we have the resources and experience to greatly expand Crest’s distribution after satisfying the demand from the existing dealer network," McNew said. "We look forward to working together to deliver profitable and sustainable market share growth, and driving efficiency in every area of our business.”


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