Patrick Industries completes acquisition of Leisure Product Enterprises
Patrick Industries announced that it has completed the acquisition of Leisure Product Enterprises, LLC. LPE is a holding company with three highly complementary manufacturing subsidiaries under its umbrella: Marine Concepts/Design Concepts, Florida Marine Tanks, and Marine Electrical Products.
LPE primarily serves the marine and industrial markets with combined fiscal 2016 revenues of approximately $75 million. The aggregate purchase price for LPE was approximately $73.5 million, and the Company expects the acquisition to be immediately accretive to net income per share.
Marine Concepts has two locations in Sarasota, Florida and Cape Coral, Florida and designs, engineers, and manufactures CNC plugs, composite molds (open and closed), and CNC molds for fiberglass boat manufacturers. Marine Concepts also produces gelcoat and fiberglass parts and assemblies for both the marine and industrial markets. Marine Concepts opened in 1976 with the purpose of providing all-in-one product design and development services, and is the industry leader, producing tooling and molds for the hulls of the majority of U.S. fiberglass boat manufacturers.
FMT is located in Henderson, North Carolina and manufactures, fabricates, and assembles aluminum fuel and holding tanks for the marine and industrial markets. FMT was started in 1974 and today provides an industry-leading platform of design, engineering, and fabrication services for aluminum fuel, water, oil, and holding tanks.
MEP is located in Lebanon, Missouri and manufactures custom wire harnesses, fiberglass and fiberglass reinforced thermoformed helm systems, dash panels, and instrument panels for the fiberglass, aluminum, and pontoon boat segments. MEP, which was started in 1983, also produces custom parts and assemblies for the industrial, commercial, and off-road vehicle markets.
“We look to continue to build on our marine platform, which after the LPE acquisition represents more than $125 million in combined annualized revenues, complements our value proposition to the marine market, and will help drive synergy realization. We believe the marine industry is well-positioned for continued growth throughout all boat segments and this acquisition represents a growth opportunity in combination with Patrick’s current marine portfolio of companies to further expand our presence as a key component supplier in the marine market.”
Todd Cleveland, Chief Executive Officer of Patrick.
“We are extremely excited to partner with the incredibly dedicated, innovative and creative LPE team, which has a tremendous reputation in the industry for design and engineering services and delivering high quality, innovative products to the marine industry with a customer first approach. This partnership, coupled with our other distinct marine brands, provides us with an opportunity to drive a tremendous value proposition in the marine space as a premier brand supplier that can bring a growing complement of design, engineering, fabrication and manufacturing products and services, with the ultimate goal of providing turn-key solutions to the boat manufacturers. We will support these three companies with a financial and operational foundation that will allow each to capitalize on their core competencies while preserving the entrepreneurial spirit that has been so important to their success.”
Andy Nemeth, President of Patrick
“The team at Marine Concepts, FMT and MEP is excited to partner with the Patrick organization, which shares our enthusiasm, energy, and vision of continuing to design, engineer, and manufacture high quality, innovative products for the marine market. Patrick is a great long-term fit for our team and high quality brands, and we are planning to continue to drive the business model and partner with Patrick’s business units currently servicing the marine market to increase our presence and market share.”
J. Pearson, Chairman of LPE
The acquisition of LPE included the acquisition of accounts receivable, inventory, prepaid expenses, machinery and equipment, and the two manufacturing facilities located in North Carolina, and was funded under the Company’s existing credit facility. The Company expects to incur one-time transaction-specific pretax charges of $0.3 million or $0.01 per diluted share after tax in the second quarter of 2017, and will also incur purchase accounting expenses and charges related to the acquisition. Patrick will continue to operate each of the businesses on a stand-alone basis under their respective brand names in their existing facilities.