Winnebago Industries, Inc. (NYSE: WGO), a leading outdoor lifestyle
product manufacturer, today announced that it has entered into a
definitive agreement to acquire Barletta Pontoon Boats
(“Barletta”), the industry’s fastest-growing, premium pontoon boat
manufacturer, for an initial consideration of $255 million in cash
and newly-issued Winnebago Industries shares, plus up to $15
million in Winnebago Industries shares upon the achievement of
performance milestones at the end of calendar 2021. Certain growth
objectives, if achieved through calendar years 2022 and 2023,
provide the opportunity for up to $50 million in additional cash
consideration. The transaction extends Winnebago Industries’ marine
platform into one of the fastest-growing boating segments, advances
the Company’s ongoing evolution into a premier outdoor lifestyle
company, and is expected to drive significant financial accretion.
Barletta was founded in 2017 with a focus on high-quality,
innovative products, unrivaled service and strong dealer
relationships, which has allowed the company to grow rapidly in the
pontoon boat segment and establish a strong, differentiated
position in the market. The privately-owned company manufactures a
portfolio of premium pontoon boats and has a network of 125 dealer
locations across the U.S. and Canada with coast-to-coast coverage
and significant opportunity for regional expansion. Barletta
generated full-year 2020 revenues of $120.6 million and EBITDA of
$10.5 million, and expects to deliver full-year 2021 revenues of
approximately $214.6 million and EBITDA of $26.4 million.
Barletta’s growth trajectory is supported by a strong backlog of
orders. The company recently opened a new manufacturing facility in
Bristol, Indiana to add production capacity and scale to better
meet the demands of its continued growth.
"The acquisition of Barletta significantly expands Winnebago
Industries’ presence in the strong and growing marine market by
acquiring the fastest-growing brand within one of the most
rapidly-growing boating segments," said Winnebago Industries
President and Chief Executive Officer, Michael Happe. "Barletta's
premium, innovative pontoon boats are a natural fit with our
broader brand portfolio, with shared appeal among families looking
to create great experiences and memories on land or on water.
Barletta's commitment to quality, innovation and service – the same
golden threads that unite all Winnebago Industries brands – and
strong relationships with its dealer partners, has driven
tremendous growth, enabling Barletta to become a rising force in
the industry in a short period of time. We look forward to
leveraging our operational excellence, functional resources and
proven expertise in nurturing and growing outdoor lifestyle brands
to fuel the organic expansion of Barletta’s product line, market
share and margins. We are excited to welcome Barletta’s talented
employees to the Winnebago Industries team and believe this
transaction positions us well to deliver enhanced growth and
significant value creation for employees, customers and
shareholders.”
Barletta Pontoon Boats President and Founder Bill Fenech
commented, “Today is an exciting day for Barletta, as Winnebago
Industries’ track record of cultivating premium outdoor lifestyle
brands will allow us to further accelerate our growth, expand our
offerings, and gain greater share of the pontoon boat market
segment. Our shared values and dedication to creating exceptional
outdoor experiences make Winnebago Industries an ideal owner and
partner for us. We look forward to continuing to innovate and
deliver the highest-quality products, unrivaled customer
experience, and win-win partnerships with our dealers as Barletta
grows within the Winnebago Industries portfolio."
Following the close of the transaction, Barletta will operate as
a distinct business unit within Winnebago Industries. Winnebago
Industries’ public reporting will include the formation of new
Marine reporting segment comprised of Barletta and Chris-Craft.
Barletta’s manufacturing facilities will remain in Bristol,
Indiana. Bill Fenech will continue to lead the Barletta business
post-closing as its President.
Transaction Highlights
- Extends Winnebago Industries’ Marine Platform into the
Highly Attractive Pontoon Market Segment: The acquisition
of Barletta broadens Winnebago Industries’ presence in the
complementary and growing Marine market. Built on versatility,
value and accessibility, pontoon boats represent the largest and
one of the fastest-growing boating segments in North America,
growing at double-digit CAGR over the past 10 years. As the demand
for products by outdoor enthusiasts continues to grow, an expanded
marine platform will enable Winnebago Industries to grow its
customer reach and further balance its overall portfolio and
revenue profile beyond recreational vehicles (RVs). Barletta’s
premium pontoons are highly differentiated from Winnebago
Industries’ Chris-Craft brand and have very limited dealer overlap
with other Winnebago Industries brands. Additionally, the pontoon
boat market segment provides an opportunity for Winnebago
Industries to leverage the intersections between the RV and marine
lifestyles and customer demographics, enhance sales and share best
practices across the entire Winnebago Industries enterprise.
- Enhances Winnebago Industries’ Growth Profile with
Barletta’s Fast-Growing, High-Quality Brand: Recognized
for its quality and innovation in the premium pontoon boat
category, Barletta has achieved a 60+% revenue CAGR since its first
year of production in 2018 and is already ranked among the top ten
pontoon manufacturers by market share. Barletta’s three main tiers
of premium pontoons offer an extensive customer lifetime value
runway as consumers upgrade over time. Barletta will benefit from
Winnebago Industries’ proven framework for differentiation through
unique approaches to quality, innovation and service, and the
ability to leverage the Company’s operational expertise, supply
chain relationships and resources to fuel product line expansion
and broader geographic dealer penetration into untapped US
markets.
- Attractive Financial Impact: The transaction
is expected to be accretive to Winnebago Industries’ cash earnings
per share starting in the first year after closing and will also be
accretive to EBITDA margins. Barletta expects to generate
approximately $215 million in calendar 2021 revenue and has a
rapidly expanding margin profile – growing EBITDA margin from 8.7%
in 2020 to 9.5% for the last twelve months as of March 31, 2021 –
with opportunities for continued, meaningful expansion over
time.
- Deepens Winnebago
Industries’ Bench of Marine Talent and Expertise: The
addition of Barletta’s deeply experienced management team, led by
Bill Fenech, brings valuable marine expertise to Winnebago
Industries and enhances Winnebago Industries’ ability to develop
new opportunities for continued growth. The Barletta team shares
with Winnebago Industries an unwavering focus on building
high-quality products, serving as a true partner to dealers,
delivering an unparalleled customer experience, and fostering a
culture of teamwork and community for employees.
Transaction Details
- The initial transaction consideration of $255 million is
expected to be funded with $230 million in cash on hand and $25
million in newly-issued Winnebago Industries stock upon closing,
and Winnebago Industries will issue up to an additional $15 million
in Winnebago Industries stock to Barletta ownership upon the
achievement of performance milestones at the end of calendar
2021.
- The total $270 million expected initial consideration values
Barletta at approximately 8.5x Barletta’s estimated 2021 EBITDA,
including $29.7 million in acquired tax assets and excluding real
estate assets also included in the transaction valued at
approximately $15 million.
- Under the terms of the agreement, Barletta ownership is
entitled to receive further cash payments of up to $50 million upon
the achievement of certain performance milestones in calendar years
2022 and 2023.
- Following the close of the transaction, Winnebago Industries
expects to maintain its strong financial flexibility and balance
sheet with a pro forma net debt to Adjusted EBITDA ratio following
the acquisition of Barletta below the target range of 0.9 –
1.5x.
The transaction is expected to close early in Winnebago
Industries’ first quarter of Fiscal 2022, subject to regulatory
approvals and other customary closing conditions.
Lazard is serving as exclusive financial advisor to Winnebago
Industries and Faegre Drinker Biddle & Reath LLP is
serving as legal advisor.
Conference CallWinnebago Industries, Inc. will discuss the
transaction at 7:30 a.m. Central Time today. Members of the news
media, investors and the general public are invited to access a
live broadcast of the conference call via the Investor Relations
page of the Company's website at http://investor.wgo.net. The event
will be archived and available for replay for the next 90 days.
About Winnebago IndustriesWinnebago Industries, Inc. (NYSE:
WGO) is a leading North American manufacturer of outdoor lifestyle
products under the Winnebago, Grand Design, Chris-Craft and
Newmar brands, which are used primarily in leisure travel and
outdoor recreation activities. The Company builds quality
motorhomes, travel trailers, fifth wheel products, boats and
commercial community outreach vehicles. Winnebago
Industries has multiple facilities in Iowa, Indiana, Minnesota
and Florida. For access to Winnebago Industries' investor
relations material or to add your name to an automatic email list
for Company news releases,
visit http://investor.wgo.net.
About Barletta Pontoon BoatsHeadquartered in Bristol, Indiana,
Barletta Pontoon Boats is a premium pontoon boat manufacturer whose
focus on high-quality, innovative products, unrivaled customer
experience and strong dealer relationships have propelled its rapid
growth since it was founded in 2017. Today, Barletta is the
fastest-growing company in the pontoon segment with over 300
dedicated employees and an expansive network of dealer partners
across the United States and Canada. Visit barlettapontoonboats.com
for more information.
Forward Looking StatementsThis press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that forward-looking statements are inherently uncertain and
involve potential risks and uncertainties. A number of factors
could cause actual results to differ materially from these
statements, including, but not limited to risks relating to the
Company’s proposed acquisition of Barletta Pontoon Boats and
related companies (“Barletta”), including the possibility that the
closing conditions to the contemplated transaction may not be
satisfied or waived, including that a governmental entity may
prohibit, delay or refuse to grant antitrust approval; delay in
closing the transaction or the possibility of non-consummation of
the transaction; the occurrence of any event that could give rise
to termination of the Purchase Agreement; risks inherent in the
achievement of expected financial results and cost synergies for
the acquisition and the timing thereof; risks that the pendency,
financing, and efforts to consummate the transaction may be
disruptive to the Company or Barletta or their respective
management teams; the effect of announcing the transaction on
Barletta’s ability to retain and hire key personnel and maintain
relationships with customers, suppliers and other third parties;
risks related to integration of the two companies and other
factors. Additional information concerning other risks and
uncertainties that could cause actual results to differ materially
from that projected or suggested is contained in the Company's
filings with the Securities and Exchange Commission (SEC) over the
last 12 months, copies of which are available from the SEC or from
the Company upon request. The Company disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward
looking statements contained in this press release or to reflect
any changes in the Company's expectations after the date of this
press release or any change in events, conditions or circumstances
on which any statement is based, except as required by law.
Contact: Steve Stuber - Investor Relations - 952-828-8461 –
srstuber@wgo.net
Media Contact: Sam Jefson - Public Relations Specialist -
641-585-6803 - sjefson@wgo.net
Non-GAAP ReconciliationThe following information provides
reconciliations of non-GAAP financial measures relating to
Barletta, which are presented in the accompanying news release, to
the most comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in the
U.S. ("GAAP"). The Company has provided non-GAAP financial
measures, which are not calculated or presented in accordance with
GAAP, as information supplemental and in addition to the financial
measures presented in the accompanying news release that are
calculated and presented in accordance with GAAP. Such non-GAAP
financial measures should not be considered superior to, as a
substitute for, or as an alternative to, and should be considered
in conjunction with, the GAAP financial measures presented in the
news release. The non-GAAP financial measures in the accompanying
news release may differ from similar measures used by other
companies. The following tables reconcile the non-GAAP measure of
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") referred to in this press release to the
most directly comparable GAAP measure.
Barletta Pontoon Boats Net Income to EBITDA Reconciliation
($ in millions) |
Barletta 2020 Actual* |
Barletta 2021 Estimates* |
Net Income |
$9.8 |
$24.7 |
Interest Expense |
0.0 |
0.0 |
Provision for Income Taxes |
0.0 |
0.0 |
Depreciation |
0.7 |
1.7 |
Amortization |
0.0 |
0.0 |
EBITDA |
$10.5 |
$26.4 |
* Data represents Barletta Pontoon Boats, LLC.
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