Polaris has been looking to grow into the marine space for four or five years, but will not be actively looking to acquire marine entities in addition to Indiana-based Boat Holdings, which it said on Wednesday it has struck a deal to purchase.
The acquisition of Boat Holdings, which includes Bennington Pontoons, Godfrey, Hurricane and Rinker, positions Polaris as the No. 1 market share leader in the rapidly-growing pontoon segment, as well as one of the top market share leaders in the deckboat segment.
“We’re not looking to roll up the boat industry by any stretch of the imagination,” said Polaris CEO Scott Wine on a call with investors and analysts to discuss the acquisition on Wednesday. “That said, we feel really good about the team and the Vogels. If the right opportunity presented itself, we may move. We’re really happy with where we’re starting. We’re going to learn and grow from that. But, I wouldn’t expect to see an acquisition in the marine space anytime soon,”
Though once a manufacturer of personal watercraft, Polaris has not held a stake in the marine industry for 15 years.
Bennington Pontoons, which partnered with private equity firm Balmoral in 2009, generates about 70 percent of Boat Holdings’ sales through a dealer network of about 500, many of whom are exclusive to the brands.
Founder Steve Vogel will stay on as a consultant, and son Jacob Vogel will remain as CEO, reporting to Bob Mack, senior vice president of corporate development and strategy, and president of global adjacent markets at Polaris.
“Marine is a space we’ve been looking at for a long time,” Mack told Trade Only Today. “If you look at the customer base, we sell products to people who like to be outdoors. One spot we didn’t really have any product offering for was marine. It’s not because we didn’t like the space, but we didn’t have the right entry point. When we were introduced to the Vogels, we felt like that was the right match. There’s a lot of experience with leadership, and they’re really successful brands. We felt like if we were going to enter marine, this was a good place. The pontoon space is growing strong.”
It was important to Polaris to keep the teams intact across all four brands, Mack said.
“We’re not coming in thinking we’re experts running this business,” Mack said.
Polaris, which is publicly traded on the New York Stock Exchange, has experience acquiring private companies and says it learned from its purchase of Transamerican Auto Parts last year.
Stock compliance is an area familiar to Jake Vogel from his eight years working at Accenture, he said.
“It’s not anything new to me,” he said. “I grew up in Elkhart in an entrepreneurial family business climate, but I spent time out in the world, so it’s not foreign to me. It’ll be a little transition but feel we’ll be able to retain the culture of our business and the essence of who we are.”
Boat Holdings acquired the beleaguered Godfrey, Hurricane and Rinker brands in 2015 from private equity-owned Nautic Global Group, which was formed in 2005 after a large merger. That stint had left the brands in disarray, and the Vogels have focused on separating the brands and creating dedicated teams for each, Jake Vogel said.
“Rinker in particular, the way the former owners had managed the business — it wasn’t just neglect in terms of dollars invested, but time and attention, and the way the sales teams were consolidated all together with Godfrey, Rinker and Hurricane,” Vogel said. “Rinker just didn’t get any attention whatsoever. So we’ve split the businesses, because we believe that’s one of the things that drives success in marine industry. When teams have that connection with a brand and the business, and passion for the product, they identify with that brand. We gave that back to Rinker.”
Those brands have room to grow because they’re already “at a low water mark,” said Mack.
“We’ll look at opportunities to improve, but we’re building off of a low base so we actually see there’s an upside there,” said Mack.
The companies don’t envision crossover among the dealer networks, Mack said.
“We look at this as an opportunity to be connected with our powersports customers, whether it’s in the dirt or on the water,” Mack said. “If you look at the dealer bases today, both companies have been around a long time, and they both have really strong, financially stable, loyal dealers. There is very little overlap in those groups. Our view is there’s not going to be transition among those dealers between products.”
Read more about the acquisition in the July issue of Soundings Trade Only.