MONTREAL — BRP Inc. has put its marine businesses up for sale as it looks to focus on powersports products and cut the cable to its money-losing boat brands.
The Valcourt, Que.-based Ski-Doo maker said Friday it hopes to sell Alumacraft, Manitou and Telwater — all boat makers — as well as its marine parts, accessories and apparel businesses by May 2025.
The sale excludes its marquee Sea-Doo personal watercraft and pontoons as well as its jet propulsion systems.
The move comes after a tough few quarters for BRP.
The COVID-19 pandemic yielded a windfall for the outfit as North Americans turned to consumer products and outdoor recreation, but the subsequent inflation and higher interest rates have left buyers less eager to shell out on new, non-essential gear.
Its marine segment has seen losses for nearly two years, according to RBC Dominion Securities analyst Sabahat Khan. Revenue in the division fell 53 per cent year-over-year in its latest quarter. The company projected they would drop by up to 50 per cent in the current financial year.
On Thursday, BRP said it will channel its efforts toward its more renowned off-road, snowmobile and personal watercraft products "in light of the challenging economic environment."
"After careful consideration and given the current dynamics of both the marine and powersports industries, we have decided to double down on our core powersports activities and to sell our marine businesses, CEO José Boisjoli in said a release.
"Over the past few years, we have built a solid foundation by investing in the development of innovative marine products and upgrading the production facilities. As such, we believe that these iconic brands can offer attractive value creation opportunities for a new owner."
BRP acquired Minnesota-based Alumacraft, which makes aluminum fishing boats, and Triton Industries, which builds Manitou pontoon boats in Michigan, in 2018 for $81 million and $97 million, respectively.
It bought 80 per cent of Australia-based Telwater, which makes aluminum and fishing boats, in 2019 for $113 million, snapping up the remaining slice in 2021.
"Overall, BRP is still a relatively small player in the global marine market ... In comparison, BRP holds multiple No. 1 rankings across various key powersports categories," Khan said, referring to market share.
The boating industry faces headwinds from production and inventory challenges as well as higher interest rates that weigh on consumers' willingness to borrow for a big recreational purchase. New Manitou pontoon boats start at $63,800 and range up to $236,000.
"The sale of the marine businesses will likely result in a benefit to profitability over the near term for BRP, and we believe that the company's resources are better spent on the core powersports business over the medium to long term," Khan said.
BRP has hired National Bank Financial Inc. to help with the sale process.
Spun off from plane-and-train maker Bombardier Inc. in 2003, the company remains partly owned by the Bombardier-Beaudoin family.
This report by The Canadian Press was first published Oct. 17, 2024.
Companies in this story: (TSX:DOO)
Christopher Reynolds, The Canadian Press
