True to Jim Malone’s upfront style, the newly reinstalled Nautic Global Group CEO says he isn’t sure whether the company will be sold as a whole or brand by brand. But, Malone says, he thought it best to put rumors to rest by clarifying the sale situation to the extent possible.
The Indiana-based Nautic Global Group and its multiple boat brands issued a call for bidders in late August and hoped to announce a new owner or owners by Sept. 23 after a failed purchase attempt by a publicly held company. Malone declined to elaborate on the bid that fell through, but there would seem to be only a handful of possibilities, including Brunswick Corp., Beneteau Group and Marine Products Corp., or one of the newer companies that have gone public, such as ski boat builders Malibu and MasterCraft.
There have been “an enormous amount of rumors,” Malone said after issuing a press release update on the sale process. “In order to bring finality … we decided to put a process in place and level the playing field. We decided the best way to do that was to be very open about it. We’ve been very open with our employees and our vendors.
“The easiest thing would be for the company as a whole to be sold, but the bigger issue is going to be what is the best way to do it for the company, the brands, the current owners and the new owners,” he says.
Private equity firms Silver Point Capital and Oaktree Capital have owned Nautic Global for nearly a decade — a long time by private equity standards. It was formed in 2005 when Godfrey Marine and the Rinker Boat Co. merged.
The company has experienced some flux in recent years, with three presidents (Malone is serving his second stint as CEO). Technically, Malone had been the interim CEO, but that technicality went unannounced. Several other executives came and went during the various tenures. Former CEO Brad Gates decided to part ways when the intention to sell was announced internally, Malone says, maintaining that “nothing nefarious” had transpired.
“I think Brad had an enormous impact on business, and a good impact,” Malone says. “Through that I stayed as chairman of the board, [but] I was not here on a daily basis.” After the company made its announcement to sell, Gates decided to pursue other opportunities, Malone says.
Nautic Global is the sixth-largest U.S. boat manufacturer, and it holds as much as half of the deckboat market share with its Hurricane brand. The company’s pontoon brands include Godfrey, Parti Kraft, Sanpan, Aqua Patio and Sweetwater. It also builds Rinker express cruisers, Captiva sportboats and Polar Kraft aluminum fishing boats.
After Malone was brought on in late 2013 the company held a roundtable to address dealer concerns — most notably long lead times on products, parts and accessories. Malone concedes that those lead times were “not what they should be,” but he says the production schedule was 20 percent higher than in the previous year.
“We are dramatically increasing our throughput on Hurricanes [deckboats] and pontoons,” Malone says. “That is up over 30 percent.”
And progress, he says, was being made on the “nagging quality issues and detail stuff that are a pain in the neck to the dealer network.”
But after spending the past year ramping up production at some South Bend, Ind., plants that had been idle or used for storage, the company decided to put itself up for sale.
“This has been a lengthy process that started in April of this year,” Malone says. “Although we had hoped for a quicker resolution, we are confident that we are coming to the end of the process. I feel strongly that the brands associated with NGG will be a great platform for the right owner.”
The process Malone outlined included the submission of final bids by Sept. 17. The offers were to be evaluated at the company’s corporate office in Elkhart, Ind., on Sept. 21, and the best offer or combination of offers will be determined.
This article originally appeared in the October 2015 issue.