Marriage of boats and electronics. A U.S.-made colossus is born
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As it happens in the world of automobiles where electronics and information technology become an essential element in developing a simple and “user friendly” product, so it also happens in boating.
The Brunswick giant does not stop its race to become the absolute leader in the boating industry and prepares the maxi acquisition of Navico for a sum of $1.05 billion. Objective? Reach $2 billion in sales from the parts and accessories segment alone.
Brunswick Motor and Powerboat Group, owner of brands such as Boston Whaler and Quicksilver in powerboats and Mercury Marine in marine engines, is poised to enter the boat electronics business by acquiring Navico, a very important group under brands such as B&G, Lowrance, Simrad and C-MAP. The goal is to integrate Navico’s know-how to create an increasingly connected, user-friendly, and therefore manageable boat.
Brunswick acquires Navico
Navico is a private company based in Egersund, Norway. The co-owners of the brand are Altor Fund IV and Goldman Sachs Asset Management. Navico is among the market leaders in the production and development of multi-function instruments, autopilots, radars, fish-finders, and charts.
The hunger for electronics
The reasons for Brunswick’s acquisition? It is quickly said: Navico’s revenue from May 2020 to May 2021 was $470 million with major revenue growth. The efficient business model has attracted the attention of Brusnwick, which with its P&A (Parts and Accessories) segment turns over about $1.5 billion. With this acquisition, Brunswick’s goal is to touch $2.0 billion with the parts and accessories segment alone.
Also because the demand for electronics is so high. Talking with operators, it turns out that revenue projections are as much as 50 percent higher than expected. This, of course, also brings with it a problem: the great difficulties in delivery, given the out-of-control demand, the limited supply of basic components, and the limited transportation from Covid that drives up courier costs. Both in electronics and in the world of boatbuilding: today if you want to buy a boat, whether it is a dinghy or a cabin cruiser, you have to wait until 2022. Surely a “joint venture” such as Brunswick and Navico will meet this challenge.
“After a strong period of growth, we are very excited to join the Brunswick family to further strengthen our offering and support our customers in the future,” said Knut Frostad, president and CEO of Navico.
“The acquisition of Navico and its award-winning brands will immediately accelerate Brunswick’s ACES (Autonomy, Connectivity, Electrification and Shared-Access) strategy and support our vision of delivering distinctive new products and technology-enabled experiences,” said Dave Foulkes, CEO of Brunswick Corporation.
The details of the acquisition
Brunswick will use a combination of debt and cash on its balance sheet to finance the acquisition. The transaction is expected to close in the second half of 2021 and will be subject to closing conditions as well as review and approval by the authorities.
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