MCBC Holdings has provided more details following its announcement that it planned to acquire Crest Marine for $80 million. The parent of MasterCraft and NauticStar said that it expects to close the acquisition of the Michigan pontoon boat builder during the fourth quarter of 2018.
“This is a uniquely positioned brand, giving us additional diversity and presence in two of the fastest-growing areas of the boating industry,” said Terry McNew, MasterCraft CEO on a call to analysts following the announcement.
Crest had 2017 net sales of $65 million and expects net sales to reach $90 million in 2018. The company has had a combined annual growth rate of 23 percent from 2011 through 2017. “That’s more than double the rest of the pontoon category,” said McNew. “We look forward to continuing this track record.”
MCBC expects Crest to represent about 15 percent of companywide sales for the nine months after the deal closes.
Headquartered in Owosso, Mich., Crest has 120 dealers, and is the 8 largest pontoon boat builder in the country. It will remain at its current facility.
McNew said that it plans to expand the dealer network with MasterCraft dealers as well as dealers outside the network. “We think there will be a big crossover with MasterCraft dealers since 40 percent of those carry pontoon boats,” said McNew. “Our three largest dealers carry Crest, so we expect to keep growing its dealer base.”
Crest builds 12 models, all positioned in the luxury segment of the pontoon boat sector.
One of the attractive features of the acquisition, said McNew, is Crest’s vertical integration.
“We looked at other acquisition targets and Crest was more vertically integrated than others,” said McNew. “That was particularly relevant since they make their own furniture. Others we were looking at relied on outside suppliers. We knew we wouldn’t have any constraints meeting growth targets.”
MCBC said it will send production teams to the Crest’s facilities this week as it plans to make production more efficient. “We expect to achieve $5 million to $6 million in operational and cost synergies over the next five years,” said McNew.
The company said it would finance the acquisition through cash on hand and incremental term loan.