Platinum acquired eight manufacturing facilities along with six of Genmar’s top boat making brands, including Ranger.The Asset
With approximately 1,000 employees and eight manufacturing centers, Genmar is one of the world’s largest builders of recreational and fishing boats. Genmar manufactures and markets boats under several brand names including Four Winns, Glastron, Ranger, Stratos, Champion, and Wellcraft. Genmar boats are sold through a worldwide network of over 1,000 dealers.
At Issue
Global economic downturn hurt the recreational boat market, including premiere boat maker Genmar. After six months of reorganization under bankruptcy protection, Genmar began aggressively pursuing a sale process to relieve its predicament. Genmar is an operationally complex asset with thirteen diverse brands and eight decentralized facilities. Multiple parties in the bankruptcy with different interests included management, employees, and the estate. It took hard work, flexibility, and a steady hand to achieve resolution—making Platinum the right buyer for the deal.
Closing In
Our diligence process was accelerated and exhaustive. Unwilling to rely solely on financial models, we studied all thirteen Genmar brands and visited each of its eight manufacturing facilities. With brands and manufacturing facilities in remote locations, it took a dedicated Platinum team traveling to out-of-the-way places such as Flippin, Arkansas; Cadillac, Michigan; and Little Falls, Minnesota. Eighteen hours a day, seven days a week for nearly three weeks we met with management teams, employees, bankers, and dealers--nearly everyone who had an interest in the deal.
By sending people from our M&A, finance, IT, operations, HR, and legal departments out to Genmar facilities, we came to understand not only the deal but the company itself. We also built relationships that would be key in the transaction and moving forward with operating the company.
Reaching Agreement
Meeting in person with all the interested parties in the bankruptcy and discussing the situation openly and honestly was a primary task for our team. The deal hinged on bringing everyone together and hammering out a plan that satisfied all interests.
On November 30, 2009 Genmar selected Platinum Equity as the stalking horse bidder in the auction process and on January 7, 2010 the Bankruptcy Court approved, in part because it saw the completeness of our solution. We worked tirelessly to address every detail then closed the deal just 15 days later.
Simultaneous Divestiture
Simultaneously, we collaborated with a strategic buyer on a deal to divest select Genmar assets that were non-core to our investment thesis. By acquiring the entire suite of Genmar assets we provided a complete solution that appealed to the constituents in the bankruptcy. And by divesting certain assets immediately afterward we created the optimum post-bankruptcy situation for all the Genmar assets.
“Platinum is exactly who we need to be
partnered with. They spent a lot of time
understanding the company.”
—Randy Hopper, President, Ranger Boats
Moving Ahead
Our commitment during diligence fostered key relationships within the company that were critical to closing the deal and gave us insights that are leading our transition and operational plans.
At the forefront is establishing operational efficiencies in both the organization and its manufacturing. Our focus is on growing the seven brands we acquired, including flagship bass fishing brand Ranger and prestige recreational brands Four Winns and Glastron. By centralizing certain operations and establishing Six Sigma manufacturing processes, we can achieve economies of scale as well as more efficiencies across its brands. Working with GE Financial and Genmar’s strong dealer network, we intend to create a sustainable environment that will outlast the current economy.
Platinum Equity has a rich history of successfully navigating complex deals in many industries. Not all involve travel to rural Arkansas, but each has nuances that require dedication from our teams and a commitment to resolution. It’s a specialty that we focus on because we know these are companies that will benefit and thrive with our operational insight.
The Genmar acquisition once again proves our dedication to finding complete solutions even in intensely complex deals.
The Genmar deal took hard work, flexibility, and a steady hand to achieve resolution—which made Platinum the right buyer for the deal.