The light at the end of the tunnel..May be a locomotive

[T2x]

Genmar buoyed by secretive buyer
by Ben Fidler
Updated 03:10 PM, Nov-04-2009 ET
With its hopes for a reorganization no longer feasible, bankrupt boat maker Genmar Holdings Inc. is now looking to find a buyer to salvage its business.

The company, owned by Minnesota businessman Irwin Jacobs, is preparing for a Nov. 16 hearing during which it will ask Judge Dennis O'Brien of the U.S. Bankruptcy Court for the District of Minnesota in Minneapolis to reimburse an unnamed potential buyer for its due diligence expenses.

The process itself is somewhat secretive. In its Oct. 30 bidding procedures motion, Genmar said it has identified a "potential stalking horse" that, to date, has posted the best offer "from the standpoint of cash consideration and possibility of consummation."

Genmar explained that it was hiding the identity of the stalking-horse bidder "to preserve the integrity of the process," and expects to file a sale motion revealing the name of the bidder within 20 days of winning bidding procedures approval.

Jacobs, meanwhile, has said in a published report that he plans to bid on the company. It is unclear, however, whether or not he is the potential stalking-horse bidder.

Genmar had originally planned to reorganize while in Chapter 11. Jacobs himself sent out a letter to the company's dealers on Aug. 11 claiming that Genmar aimed to file its plan ahead of a Sept. 29 deadline. At the time, Genmar was selling certain noncore assets to reduce its loan balances so it could have a chance to refinance its senior debt and finalize a plan. In the meantime, however, Genmar had already hired Houlihan, Lokey, Howard & Zukin Inc. as its investment bank. Beginning in August, Houlihan contacted about 200 potential buyers, even as the company had been hoping to piece together a restructuring proposal.

Though Genmar didn't explain why it moved from reorganization to sale in court papers, Jacobs said in a published report that he couldn't get the cooperation of everybody necessary to do it.

Minneapolis-based Genmar filed for Chapter 11 on June 1, asserting the economic downturn and its significant impact on consumer spending had crippled the boat industry. The frozen credit markets left Genmar unable to find new financing sources for itself and its dealers. The debtor felt the only financing it could obtain would be through a debtor-in-possession loan.

Founded in 1978 when Jacobs bought Lund Boat Co., Genmar has expanded into a company selling 13 brands of boats, from small powerboats to luxury yachts, and touts itself as the "world's premier builder of recreational boats." Its brands include Carver, Champion, Four Winns, Glastron, Ranger, Seaswirl and Wellcraft.

Genmar, which has more than 1,000 independent dealers in all 50 states, is the second-largest manufacturer and distributor of fiberglass powerboats in the world, having sold more than 24,000 of its products during the fiscal year ended June 30, 2008.

The company listed $237.5 million in assets and $216.5 million in debts in its petition.

James Baillie, Clinton Cutler, Douglas Kassebaum and Ryan Murphy are debtor counsel at Fredrickson & Byron PA in Minneapolis.

[Chris]

I know- it's Reggie.

[Salesmanship]

Hustler?

[rschap1]

I was thinking Merc or Volvo...

[Bobcat]

China

[Ted]

Sierra Club, one boat company at a time.

[OldSchool]

Hustler?

Hey, that would get people talking!

[T2x]

This a lot deeper than speculation about buyers.....

You are looking at the possible extinction and certain decimation of a large number of long term "brands" in the core marine business..........

Like I put in earlier posts.....and I continue to put forth.....

even this ....is still...... the tip of the iceberg.

It's time for a serious conversation about how drastically different boating and the boating industry will be in the future.....and that especially includes High Performance boating.

Do not ask for whom the bell tolls...........

T2x

[Excalibur Racing]

With Obamanation the bell tolls for all of us! The Second Admendment. Washington didn't use his right to free speach to defeat the British, he shot them!

[JupiterSunsation]

This a lot deeper than speculation about buyers.....

You are looking at the possible extinction and certain decimation of a large number of long term "brands" in the core marine business..........

Like I put in earlier posts.....and I continue to put forth.....

even this ....is still...... the tip of the iceberg.

It's time for a serious conversation about how drastically different boating and the boating industry will be in the future.....and that especially includes High Performance boating.

Do not ask for whom the bell tolls...........

T2x

Your point is well taken about having too many duplicate boat brands competing for a shrinking pool of buyers.

What is the difference between a Crownline and a Rinker? GM had come to that same realization and closed whole brands of cars due to similarities. Pontiac and Saturn were very close to being identical.

Whatever shakes out on the production side will have waves of issues for Brunswick- Mercury since they dominated the engines used in these duplicate boat brands.

Perfomance may not be as much of an issue since many are low production, Cigarette, Nortech, OL, all build less than 50 boats a year. Genmar build 24,000 last year. Fountain/Donzi could be considered high volume (when in production) and would be adversely affected.

[LEOPAJM]

Mike Vorce ?

Thats not even funny ....... sorry !

[Twin27Advantage]

Mike Vorce ?

Thats not even funny ....... sorry !

It is!

[phragle]

Trick powerboats..wellcraft by Fred...

[T2x]

Perfomance may not be as much of an issue since many are low production, Cigarette, Nortech, OL, all build less than 50 boats a year. Genmar build 24,000 last year. Fountain/Donzi could be considered high volume (when in production) and would be adversely affected.

Ahhh! ...But the sourcing infrastructure that exists primarily for the large volume brands including everything from hardware, engines, drives, fibreglass laminating materials and tools, gel coats, etc will all be negatively impacted and ultimately more pricy , if available at all.

I am very concerned about Brunswick/Mercury as more and more of my friends there are laid off or retired and the technological braintrust that put them at the top of the performance world in terms of props, drives, stern drive powerplants, racing outboards and hardware is rapidly declining. Many of their performance service shops (Ocean Outboard, et al) are also shrinking or disappearing. But, again, this is only one component of the performance supply chain. While I admire the efforts of the Ilmors, and Sterlings of the world, something tells me that the current cash crunch has to be severely hurting their R&D efforts and service infrastructure as well.

"Limited Production" may not be any more of a viable model than mass production in a time of restricted credit avenues, reduced resale values, disappearing reasonably priced vendor sources and "cap and trade" legislation.

This is truly a "perfect storm".

T2x

[DollaBill]

The industry will never be the same. Rich, you are spot-on with your comments.

[JupiterSunsation]

Ahhh! ...But the sourcing infrastructure that exists primarily for the large volume brands including everything from hardware, engines, drives, fibreglass laminating materials and tools, gel coats, etc will all be negatively impacted and ultimately more pricy , if available at all.

I am very concerned about Brunswick/Mercury as more and more of my friends there are laid off or retired and the technological braintrust that put them at the top of the performance world in terms of props, drives, stern drive powerplants, racing outboards and hardware is rapidly declining. Many of their performance service shops (Ocean Outboard, et al) are also shrinking or disappearing. But, again, this is only one component of the performance supply chain. While I admire the efforts of the Ilmors, and Sterlings of the world, something tells me that the current cash crunch has to be severely hurting their R&D efforts and service infrastructure as well.

"Limited Production" may not be any more of a viable model than mass production in a time of restricted credit avenues, reduced resale values, disappearing reasonably priced vendor sources and "cap and trade" legislation.

This is truly a "perfect storm".

T2x

I never considered the supply chain issues even for small, custom builders.

Those are real issues but I think the shrinking buyer's pool is more troubling. How many people will have the resources to buy or the interest to buy a limited use watercraft? At least with a center console or cruiser the boat can be thought of as a multi-task/purpose vessel. Now factor in the seasonal usage for 90% of the US market and you end up with a expensive toy with limited time to use it.

After attending the boat show last week in Lauderdale and looking through the classifieds, repo yards I couldn't imagine laying down 400K for a new boat when a like new one can be had for 1/2 or less. It just doesn't make sense (that coming from someone who did buy new in 2004, boat debuted that year/couldn't buy one used at the time).

Should be an interesting next couple of years for the boat industry.....

[GENERAL LEE]

ALL, that matters, is that Peter is feeling great, and building boats that will be around to show future generations the essence of going fast.....

Tell me about the apocalypse when that scenario gets disrupted.

[masher44]

Thanks for the deep insight and dumbing it down to my level. It's a pleasure to once again listen to your tripe about the wonderful world of boating no one knew about... Very informative thread

[PatriYacht]

As long as gas prices are high and appear to be going higher, people will shy away from buying boats. With cap and trade legislation in congress and present restrictions on drilling, 5 and 6 dollars a gallon for gas is a distinct possibility. Not many people are willing to spend 500.00 on gas alone to use their boat each weekend.

[Steve 1]

What Rich said is right and the fact we have less than Circus monkeys running things in DC like the Green Energy Scam while completely ignoring and handcuffing domestic supply (we have more energy than anyone else) Our lives, well being and Industry run on Oil right now and that is being taken away.

And of course the Criminal algore is now a billionare from this Carbon Madness with a following of brain damaged leftist set on breaking this country there can be no recovery without OIL.

Right now all we can do is vote this rubbish out of office until that happens figure out how to put a windmill on your boat.