Sale of Genmar
From Bass Fan:
Genmar will be sold 10/30/2009
In a bankruptcy court motion today, Genmar Holdings, Inc. requested permission to move forward with a sale of its assets and effectively abandon its effort toward a financial restructuring.
The news was announced to Genmar dealers in a letter from Genmar president and CEO Roger Cloutier.
The legal motion, filed earlier today, notes that both bankruptcy strategies – refinancing/reorganization and sale of assets – were pursued simultaneously, but it was determined that a sale of assets was the only tenable exit strategy.
Additionally, a stalking horse (i.e. potential buyer) has arisen. The stalking horse was not named in the motion – Genmar said to do so would jeopardize the sale process – but the motion did request that Genmar be allowed to enter into an exclusivity and expense agreement with the stalking horse. Such an agreement would preclude Genmar from entertaining offers or negotiating with other potential buyers.
The motion, however, includes language that would allow Genmar chairman Irwin Jacobs (pictured) to match or better the stalking-horse offer through a reorganization/refinancing or purchase offer, provided he act solely as a personal agent and not in connection with Genmar.
Jacobs was reportedly in court this week in the attempt to remove Ranger from the bankruptcy.
What isn't clear is whether the stalking horse has proposed to purchase all of Genmar's assets, or certain brands and facilities.
Rumors have run rampant through the industry the past several weeks that certain parties were interested in a purchase of Ranger Boats – namely Yamaha, Evinrude and a group headed by Ranger founder Forrest Wood and current president Randy Hopper that also includes Ranger employees. There's likewise speculation that Jacobs could seek to regain ownership of the Genmar bass-boat brands, which might help buoy his stake in FLW Outdoors, which he owns, but has recently encountered difficulty in a soft economy and sponsor market.
The fate of the Stratos and Champion brands remains equally cloudy.
And some reaction to it:
Bursting Bubble
What The Ranger Sale Really Means
Saturday, October 31, 2009
by BassFan Editor-in-Chief Jon Storm
The events of this week have shown us just how tenuous major-league bass fishing truly is. It's the final pop of the decade's fishing bubble – the same one that burst in NASCAR – and it started with the Citgo and Anheuser-Busch pullout from BASS, followed by the Advance Auto Parts retreat.
It's somewhat fortunate for BASS that its sponsor collapse happened largely before the current recession. BASS scaled back, regrouped and moved forward primarily with support from endemic companies that don't have any choice but to participate, no matter the economic clime. And I count Toyota in BASS's endemic portfolio, because a truck and boat go hand-in-hand.
Trouble at FLW Outdoors began last year when Playtex and ConAgra walked away, and continued this year with zero or diminished involvement from Land O' Lakes, Walmart, BP and uncertainty about Castrol, Proctor & Gamble and others.
Plus, FLW's biggest endemic sponsor, Pure Fishing, walked away this week. The hope among everyone is that Cabela's can help fill that void, but it hasn't exactly been a stellar year for retailers.
In response, FLW Outdoors has cut trails, cut purses, cut staff and cut production costs.
Amidst all that concern, though, came yesterday's bombshell that Genmar will be sold – probably within the next few weeks. That means Ranger's on the selling block. And remember that Ranger is the sole reason FLW Outdoors exists.
It's decidedly hard to imagine that Irwin Jacobs, who serves as both Genmar chairman and FLW Outdoors chairman, would put all his weight behind FLW Outdoors to help sell boats for a party that wrested Ranger away from him.
What if Bombardier (Evinrude) makes a play and gets Ranger? The engine manufacturer and Jacobs are currently in a spitting match that undoubtedly traces back to the Genmar bankruptcy and the significant monies owed between Evinrude, Genmar and FLW Outdoors. How would Jacobs feel about operating FLW Outdoors to sell boats for Evinrude?
After all, Jacobs knows his way around bankruptcy courts – he built Genmar by purchasing bankrupt boat companies for pennies on the dollar.
The news is the same at Brunswick – there's no love lost between that company and Jacobs.
Then there's the possibility that Ranger could go to a buyer who just doesn't get the whole pro-fishing thing. And would such a buyer pay off the balance of what Ranger owes FLW Outdoors (Operation Bass) – listed as $3.26 million at the start of the BK? Would such a buyer honor Ranger warranties?
There's certainly a buzz in the fishing community that Ranger founder Forrest Wood, along with current Ranger management and employees, could make a play.
As it sits right now, Genmar shopped itself heavily for the past few months and no clear buyer emerged. It wasn't able to obtain the credit to bail itself out, and so the sell-off has begun.
During that shopping period, Genmar selected one party (named only as the stalking horse) as being in the best position to purchase assets. That doesn't necessarily mean the stalking horse is truly interested. There's every possibility it's simply a straw buyer meant to fend off outside parties and gain Jacobs time to buy back profit-makers like Ranger and Four Winns.
After all, Jacobs knows his way around bankruptcy courts – he built Genmar by purchasing bankrupt boat companies for pennies on the dollar.
Caught in the middle are the creditors that Genmar owes – everybody from engine manufacturers to media to parts suppliers to lure manufacturers to pros.
And right now there are families all around the U.S. wondering if dad will have a job next year as a pro fisherman. Much of that depends on who winds up with Ranger, and to a lesser degree Stratos and Champion.
It's tough to grasp all the ramifications of what happened this week, but through it all, one truth resonates: Don't underestimate concern for the future of FLW Outdoors with Ranger on the auction block.
At this time I (Johnnie Candle) really don't know what to think of all this. Every scenario I run through my head is not a good one. The game is changing. The one thing I will say for sure is that those that cling to the way it was before will not be happy. I do not have any answers, but I know I will be working hard to stay ahead of this curve.
Best of luck to all of you with your plans for tournament angling this year and for many more to come.
__________________
Keep the line tight!
Johnnie Candle
#42
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