Polaris Makes Big Splash in Boat Business
Polaris Industries Inc. is going off-road to find new growth opportunities. But the company isn’t in the weeds: they’re on the water. On Wednesday morning, Medina-based Polaris announced a $805 million deal to acquire Elkhart, Indiana-based Boat Holdings LLC, the nation’s largest manufacturer of pontoon boats.
Polaris is best known for its snowmobiles, off-road vehicles and motorcycles. The pending deal means that Polaris will land with a big splash in an entirely new line of business for the company. Boat Holdings has four recognized brands: Bennington, Godfrey, Hurricane and Rinker. The deal is expected to close in the third quarter.
The deal marks the largest acquisition in Polaris history, said company spokeswoman Jess Rogers.
“Boat Holdings expands Polaris’ footprint in the recreational outdoors market, commanding more of consumers’ discretionary spending. Our product lineup will offer options to be enjoyed on the roads, trails, sand, dirt, snow and water,” said Scott Wine, Polaris chairman and CEO, in a statement.
Last week, Polaris made its debut on the Fortune 500 list, an annual ranking of the largest publicly traded companies in the U.S. Polaris placed 496th on the list. (St. Paul-based Securian Financial was also new to the list this year at the 462nd spot.)
As for Polaris, it landed in the Fortune 500 on the strength of its sales growth. For 2017, the company reported a more than 20 percent increase in sales to $5.4 billion. Polaris had a net profit of $172.5 million for 2017. Boat Holdings had approximately $560 million in sales last year.
So far this year, Polaris continues to post solid growth. For the first quarter of 2018, Polaris reported a 12.5 percent increase in sales to $1.3 billion.
The Boat Holdings deal reflects Polaris’ self-described “Growth Through Adjacencies” strategy to diversify its business. The company is looking for new business in markets that have a connection to its core products.
In November 2016, the company acquired California-based Transamerican Auto Parts Co., a maker of accessories for off-road vehicles and trucks, for $655 million.
The Transamerican acquisition was a key part of the company’s increased sales in 2017. Its aftermarket segment, which includes Transamerican, added more than $693 million in sales for Polaris compared to 2016, when it only owned Transamerican for a fraction of the year.