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Winnebago (WGO) Fortifies Marine Market Foothold on Barletta Buyout

·4 min read

Winnebago Industries, Inc. WGO recently entered into a definitive agreement to acquire Barletta Pontoon Boats, a premium pontoon boat manufacturer, for an initial consideration of $255 million, of which $230 million will be funded though cash and $25 million in the newly-issued Winnebago shares.

Winnebago will also provide $15 million in shares upon the accomplishment of certain performance targets at the end of calendar-year 2021, and up to $50 million in additional cash consideration upon achieving certain growth objectives through 2022 and 2023.

Winnebago expects the transaction to complete in first-quarter fiscal 2022. The acquisition is projected to be accretive to the company’s cash earnings per share in the first year after closing and also add to its EBITDA margins.

Following the announcement of the acquisition, shares of Winnebago rallied 7.7% yesterday to close the trading session at $68.59.

Founded in 2017, Barletta manufactures a portfolio of high-end pontoon boats, and has a network of 125 dealerships across the United States and Canada. Barletta's commitment to quality, innovation and service and robust network of dealer partners has fueled stellar growth, enabling Barletta to rise exponentially in the pontoon boat segment and become a powerful force in this market segment.

Barletta registered 2020 revenues of $120.6 million and EBITDA of $10.5 million, and expects 2021 revenues of $214.6 million and EBITDA of $26.4 million. The company recently opened a new manufacturing facility in Bristol, IN in order to scale up its production capacity and better cater to customer demands.

Post the deal’s completion, Barletta will operate as a distinct business unit within Winnebago. Barletta’s president and founder Bill Fenech will continue to head the Barletta unit post the transaction’s conclusion.

Win-Win Deal for Both Companies

Iowa-based Winnebago is one of the leading recreational vehicles (RVs) producers in the United States. The company has been riding on strength of acquisitions, including Newmar, Grand Design and Chris-Craft.

Amid the soaring popularity of boats, the latest acquisition expands Winnebago’s marine platform into one of the fastest-growing and most appealing boating segments — the pontoon boat segment — which has bloomed at double-digit CAGR over the last decade. The enhanced marine platform will enable Winnebago Industries to broaden its customer network, and further augment the company’s portfolio and revenue stream beyond RVs.
 
Winnebago is thrilled to welcome Barletta to its team. Barletta's high-end, innovative pontoon boats naturally complement Winnebago’s legacy business of RVs and are highly differentiated from Winnebago’s Chris-Craft brand. Additionally, the pontoon boat market segment provides Winnebago an opportunity to take advantage of the intersections between the RV and marine lifestyles, in turn, boosting its market share and margins. Apart from these, the buyout leverages Winnebago’s operational excellence, functional resources and proven expertise to advance the RV maker’s evolution into a premier outdoor lifestyle company. The transaction is also anticipated to create significant value for its employees, customers and shareholders as well as accrue significant financial gain.

The inclusion of Barletta’s highly talented management team ushers valuable marine expertise into Winnebago, thereby driving product-line expansion and enhanced penetration into the untapped U.S. markets.

Barletta is also very optimistic about this partnership. Winnebago’s outstanding track record of developing premium outdoor lifestyle brands will enable Barletta to further bolster its offerings and achieve greater share of the pontoon boat market segment. Following completion of the alliance, Barletta will continue to grow within the Winnebago portfolio, and deliver high-end products and unparalleled customer experience.

Winnebago, peers of which include Camping World Holdings CWH, REV Group REVG and Thor Industries THO, currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


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