Brunswick Corp. acquired water movement and heating systems manufacturer Whale, a move the company had hinted at in its attempt to further grow the parts and accessories arm of its marine group.
Based in Bangor, Northern Ireland, Whale had more than $30 million in sales in 2013 and will be integrated into Brunswick’s marine parts and accessories business at Mercury Marine.
Terms of the transaction were not disclosed.
“Parts and accessories has become an increasingly important part of our marine business at Brunswick,” chairman and CEO Dustan E. McCoy said in a statement. “We have done a good job of organically growing our marine P&A business, but we also see an opportunity to expand the depth, breadth and global presence of this business through strategic acquisitions. Further, this transaction is consistent with our strategy to utilize our free cash flow to grow our core businesses.”
“By incorporating such acquisitions into our current P&A growth plan, we believe we can enhance the growth of the P&A business; broaden the product portfolio; enable our entry into attractive adjacent markets; and expand our global presence in the P&A space.”
McCoy has hinted that the company might be looking to buy more than one P&A company. During a first-quarter earnings call with analysts and investors, he told investors and analysts that during the next 18 months to two years followers might see Brunswick acquire “support marine parts and accessories businesses.”
Recently Brunswick president and COO Mark Schwabero told Trade Only that the company has been clear about wanting to grow the P&A side of its business “by bolt-on acquisitions or leveraging infrastructure to go into some new markets.
“We’ve said those are strategic objectives, and as I’ve mentioned, part of my role is to achieve the strategic objectives, and we’re on that path,” Schwabero told Trade Only.
Parts and accessories account for 43 percent of Mercury’s sales, and Mercury is the largest division of Brunswick, making the P&A side “a significant piece of the Brunswick portfolio,” he said.
“It’s a very stable portion,” Schwabero said. “It doesn’t have the degree of cyclicality to it that a pure marine play would have because you’re dealing with a much larger population. So you don’t see the kind of peaks percentage improvements year-over-year on the upside or on the downside, but it’s a market that’s showing nice year-over-year growth for us as a corporation.”
Whale will continue to be based in Bangor and will operate as part of Lowell, Mich.-based Attwood, a leading brand in Brunswick’s marine P&A operations. The acquisition is expected to have a minimal impact on Brunswick’s earnings in 2014.
