PDA

View Full Version : Roger Penske buys MasterCraft Boat Company


ProStarMike
08-23-2007, 04:51 PM
All:

Did anyone see this news? Sounds like it happened last week. If I missed this thread last week, sorry in advance for the duplicate post!

Penske is the man when it comes to innovation and performance, so I think it is probably a good thing. Thoughts?

-- Mike


The Sport of Boating and the way the Boating Industry conducts business may never be the same.

Last Wednesday, August 15th, Roger Penske bought MasterCraft Boat Company for an undisclosed amount of money. The press release said, "Charlesbank Capital Partners and Transportation Resource Partners (TRP) have announced plans to jointly acquire MasterCraft Boat Company, in partnership with management, from US Equity Partners, an investment fund sponsored by Wasserstein & Co..."

What all of that means is that Roger Penske – the Managing Director of TRC -- has not only discovered boating, but also the boating industry. To find out more about the deal, about Penske and the way he does business, and what we think this might mean to the sport...click here.

east tx skier
08-23-2007, 04:54 PM
There was a thread last week, but it apparently got disappeared.

:popcorn:

ProStarMike
08-23-2007, 04:57 PM
From the release:

"A Hot Category

MasterCraft, located in Vonore, TN, is the world’s second largest builder (about 2300 units in 2006) of water ski and wakeboard boats, after west coast builder Malibu (2900 units in ’06). The total US market for these specialized inboard-powered boats is about 10,000 annually, with the rest of the market made up primarily of Correct Craft (1600 units), Moomba (1260 units), Supra (644 units) and Tigé (850 units).

The market for these boats is small, but it has been one of the few growing categories in the sport over the last few years, thanks to the advent of wakeboarding – both with and without a tow rope. It is simply snowboarding on the water, with about the same constituency. Ski/wakeboard boats are also complex and the most creatively-designed boats on the market these days for their size. They are also expensive.

Electricity in the Hallways

Located on the banks of Lake Tellico, south of Knoxville, MasterCraft tests every one of its boats before shipment and has professional ski/wakeboarders on staff to work out the wrinkles on new products and suggest innovations.

Company president and CEO John Dorton says that the plant will stay in Vonore and will likely add employees due to booming international sales and its saltwater line. “The entire management team will stay intact,” Dorton said, and that is likely to be true since one of the stated acquisition requirements of TRP is a solid management team already in place. MasterCraft has that and the halls of the executive offices are electric with excitement – more what one might expect in Silicone Valley than in the sleepy boating industry – as the young execs dart from meeting to meeting, cooking up the next ad campaign, or product feature, or new model.

5,000 Annual units in 5 Years?

Dorton also said he expects business to double for MasterCraft during the next five years and with this deal the company will have the financial backing (thanks to Jefferies and Co.) to meet its goals. Roger Penske said in the press release, "MasterCraft has established an outstanding reputation for performance, quality and product innovation. We are pleased to have joined the MasterCraft team and look forward to supporting the company during the next phase of its growth."

In the M&A business, the seller usually knows more about the company and its prospects than the buyer, and often that is why the company is on the market. But in this case, it looks like the VC owners made a tidy profit and would like to move on given the volatility of the boating market, and the new VC buyers have their eyes wide open and some pretty big plans.

Andrew Janower, managing director of Charlesbank Capital Partners, also commented on the acquisition in the release, saying, “…We have partnered successfully with TRP in the past, and now we look forward to putting our combined strength behind the preeminent MasterCraft brand to help the company capitalize on its many opportunities for growth."

Datdude
08-23-2007, 05:41 PM
Very interesting......I wonder what the "undisclosed amount" was?:rolleyes:

H20ski Dude
08-23-2007, 06:00 PM
that's big money behind them, which is good for growth. like many others may have done, don't loose focus on what got you there in the first place. I am really disappointed at the lack of closed bow options on the water, not everyone wants a bowrider.

interesting to see moomba is ahead of supra even though it is flagship brand from UMT... low cost is working for them it seems.

clubrcr
08-26-2007, 08:26 AM
It will be interesting to watch this unfold.

When you try to appeal to the mass public, and widen the range of products, two things could happen. First, no matter how much you try to keep quality standards high, the first couple of years, quality to suffers. You hire new employess and the try new things, These works themselves out over time, but hurt the initial quality standards.

The next item for concern is the number of units out in the market. When a company produces more units, it tends to hurt re-sale in the used market.

If you question this, go back and read about Porsche from 1999-to present. They increased their sales revenues and pumped out cars that were considered Lexus type sports cars. The resale market saw depreciation like in no other time period and actually made the pre 1999 cars appreciate in value.

I think it is wonderful that Mastercraft is trying to appeal to the "baby boomer" population, since that is were the money is spent, but like someone mentioned in an earlier post, they don't need to forget who brought them to where they are today.

jpattigr
08-26-2007, 01:50 PM
One thing to remember about the sales numbers posted was that these numbers were USA sales and do not count International sales of all brands. It would be interesting to see how many boats each brand produces and who has made the best push in the rest of the world.
Where I live, Mastercraft has a very good dealer and does big volume, along with Malibu and Tige. CC does poorly in sales.

MYMC
08-27-2007, 10:17 AM
It will be interesting to watch this unfold.

When you try to appeal to the mass public, and widen the range of products, two things could happen. First, no matter how much you try to keep quality standards high, the first couple of years, quality to suffers. You hire new employess and the try new things, These works themselves out over time, but hurt the initial quality standards.

The next item for concern is the number of units out in the market. When a company produces more units, it tends to hurt re-sale in the used market.

If you question this, go back and read about Porsche from 1999-to present. They increased their sales revenues and pumped out cars that were considered Lexus type sports cars. The resale market saw depreciation like in no other time period and actually made the pre 1999 cars appreciate in value.

I think it is wonderful that Mastercraft is trying to appeal to the "baby boomer" population, since that is were the money is spent, but like someone mentioned in an earlier post, they don't need to forget who brought them to where they are today.
While I agree that you need "to dance with who brought you", if you are not growing you are dying...and the only way to grow the company is to appeal to more buyers. The inboard segment has sold 10,000 total units for the last 8-10 years, so all that is really happening is a shuffling of buyers from one brand to another.

On another note Porsche had more happen than just "pumping out cars" to raise revenue. When the 993 run ended and the 996 started the 911 was water cooled for the first time (skipping the heads of the 959) and many purists stayed away (and still have). It was the end of an era, and milestones like that help to retain value...especially in a cultural icon like the 911.

88 PS190
08-27-2007, 10:23 AM
At the same time Porsche purists fight will lousy heating in the aircooled models,

So go figure.

tones03
08-27-2007, 10:30 AM
Penksy owns an awsome yacht. Not sure the brand, but it is called the Detroit Eagle, i will see if I can find some pics.

JohnE
08-27-2007, 11:47 AM
All:

Did anyone see this news? Sounds like it happened last week. If I missed this thread last week, sorry in advance for the duplicate post!


As ETS said, there was a thread here about 2 weeks ago announcing it, but it was deleted. A few of us did get to read it though. Not sure why it was deleted. It didn't say anything derogatory. Thanks for posting it again. It must be safe to discuss now.

Leroy
08-27-2007, 11:53 AM
If Dorton is expecting to double business in 5 years he will likely need to enter another boat segment or two.

endl
08-27-2007, 12:27 PM
You probably have heard rumors also about the CSX 265 with twins. My dealer said he thought they might even get to see one when they go to Orlando. Costal boats I would guess will be the big push.

sand2snow22
08-27-2007, 09:44 PM
If Dorton is expecting to double business in 5 years he will likely need to enter another boat segment or two.

Maybe he's thinking about buying someone?

Leroy
08-27-2007, 10:21 PM
Could be, I would not think in the ski market, but I expect more coastal boats and pure speculation on my part for a Boston Whaler name would be nice for them.

But he is not going to double the size of the ski/wakeboard market, so more coastal boats seems likely to me.

Maybe he's thinking about buying someone?

H20skeefreek
09-27-2007, 10:24 AM
interesting thing I just saw on the Tige website. They say there floor is a ":3/8" Penske" floor. Interesting....I have no idea what that means, but I caught my eye.

Roonie's
09-27-2007, 10:41 AM
Curious if MC is going to spur off a line of cheaper boats like Supra/moomba. It seems a lot of companies do that these days to get more marketshare. If I was to guess that would be mine.

Sodar
09-27-2007, 10:43 AM
Curious if MC is going to spur off a line of cheaper boats like Supra/moomba. It seems a lot of companies do that these days to get more marketshare. If I was to guess that would be mine.

MC has said before that their used boats are their cheaper line and they will not compramise its dedication to quality for a price-point boat. Could be all marketing BS, but that is what I have heard...

RexDog1
09-27-2007, 10:50 AM
MC has said before that their used boats are their cheaper line and they will not compramise its dedication to quality for a price-point boat. Could be all marketing BS, but that is what I have heard...

I was told by my dealer when the X1 came out on lower “price-point” then change their marketing on it, is this true?:confused:

Roonie's
09-27-2007, 10:55 AM
Look at the guy who started Bayliner. His whole objective was to get every family in a boat at the cheapest cost. He is a multi millionaire as I have seen his personal mega yacht in the San Juan islands as he uses his helicopter to come ashore since the yacht is too big to moor at the dock. Cheap worked for him and he made a lot of money. I could see MC doing a price point boat calling it something else but built by MC. Go where the money is, not that I agree with it.

JimN
09-27-2007, 11:12 AM
A couple of differences exist between MC and Bayliner. First, they started 45 years ago and the intent was to build cheap boats that weren't used for anything specific like skiing or wakeboarding, which are a limited market. For $20K, you could buy a decent house so if a Bayliner sold for more than $1000, I'd be surprised. If you ask around and know boats, Bayliner has never had a reputation for high quality although their recent boats are a lot better than they were. I would have to assume Brunswick did the typical 'become their only supplier for something they absolutely need and cut the supply to the point where they have no choice but to sell out to you or go under' tactic but they could have used better materials.

Sure, they were open about what they wanted to make but having a reputation for cheapness is hard to lose.

The MC Sportstar 19 was their way of making a boat that could be sold at a lower price but that was a closed bow and I'm not sure they have an old hull design that they can use, to do the same thing now. If they start a new company, make a boat that really sucks and people find out it's part of MC, it won't be pretty.

Roonie's
09-27-2007, 11:18 AM
I agree completely. Just throwing the suggestion out there. I am curious how they plan to double there market share when already they lead in innovation and design and are known for quality product. Are the over zealous with their estimation and only a want to double market share or do they have a real plan?

MYMC
09-27-2007, 11:25 AM
Obviously John, Scott & the Penske Group can change direction anytime they want; however, even as late as the Dealer Meeting it was made clear that they intend to stay the course with the direction that has brought them here. I would look to new models like the 265CSX & 220CSX to be where the growth comes from. Also, keep in mind that most of the Salt Water sales are incremental growth to the company, and that includes all models across all lines. I wouldn’t look for anything “Moomba-ish or Bayline-ish” anytime soon…thank god.

sand2snow22
09-27-2007, 12:25 PM
I agree completely. Just throwing the suggestion out there. I am curious how they plan to double there market share when already they lead in innovation and design and are known for quality product. Are the over zealous with their estimation and only a want to double market share or do they have a real plan?

If they want to double in the near future, they need to buy someone. Especially with the housing market cooling....

Ryan
09-27-2007, 01:11 PM
Why do they have to buy someone? I see nothing about doubling by next year. It could be possible in 5 years,. Since we do not know if that's US @ 10k, or Int'l at 10k, is there anyone that has one of those NMMA data books with mfrs units sold? What if they are already at 7k/yr int'l?

MYMC
09-27-2007, 01:27 PM
If they want to double in the near future, they need to buy someone. Especially with the housing market cooling....
Why buy someone that is losing market share and making less units just to meet a stated goal? If you look at the current demogrpahic profile for an MC buyer the housing ATM has little to do them.

ski_king
05-10-2009, 01:30 PM
It looks like MasterCraft may be getting Saturn as a sister company as Penske is considering buying it from GM.
http://news.yahoo.com/s/ap/20090508/ap_on_bi_ge/gm_saturn_penske_1

I am not sure how this will work out as the current Saturn line is re-badged cars from the other GM lines.

sand2snow22
05-10-2009, 03:52 PM
It looks like MasterCraft may be getting Saturn as a sister company as Penske is considering buying it from GM.
http://news.yahoo.com/s/ap/20090508/ap_on_bi_ge/gm_saturn_penske_1

I am not sure how this will work out as the current Saturn line is re-badged cars from the other GM lines.

Why buy someone who is clearly losing market share?????? Then again, I don't fit the average $250k/year MC customer, I used the equity in my house to purchase my boat.......

TMCNo1
05-10-2009, 07:59 PM
Kurt Busch will look good in the Penske Racing #2 Miller Lite Saturn Sprint Cup Aura race car,
47306

trickskier
05-10-2009, 08:41 PM
Kurt Busch will look good in the Penske Racing #2 Miller Lite Saturn Sprint Cup Aura race car,
47306

Not if he calls Roger "Dude" again!!! 8p

TMCNo1
05-10-2009, 09:32 PM
Not if he calls Roger "Dude" again!!! 8p

Or stopped on suspicion of drunken driving and cited for reckless driving after a confrontation with Maricopa County deputies in Phoenix, AZ, like he did with Jack Roush and suspended for the rest of the year, http://sports.espn.go.com/rpm/news/story?series=wc&id=2225347.
He's been talking a lot here lately in interviews about drinking beer and I hope it doesn't come back to bite him.:o

kev88
05-10-2009, 09:52 PM
Or stopped on suspicion of drunken driving and cited for reckless driving after a confrontation with Maricopa County deputies in Phoenix, AZ, like he did with Jack Roush and suspended for the rest of the year, http://sports.espn.go.com/rpm/news/story?series=wc&id=2225347.
He's been talking a lot here lately in interviews about drinking beer and I hope it doesn't come back to bite him.:o

Kurt also made amends with deputies in Phoenix after the fact - that incident was blown a little out of proportion. Kurt had already signed with Penske when the incident occured - I think Jack was miffed about that........

And I like his brother too......:D